By Ulf Laessing
TRIPOLI (Reuters) - On the surface life looks normal in the Libyan capital. Cafes are bustling with customers sipping cappuccino, while well-stocked shops sell anything from Italian underwear to French cheese.
But as in the days of Muammar Gaddafi, many residents prefer to avoid talking politics in Tripoli, where a self-declared government has ruled since an armed faction called Libya Dawn seized the capital by expelling its rivals in August.
Across Libya to the east, where the internationally recognized government operates and a former general is battling Islamist militants, many Libyans are just as wary, fearing any criticism will see them branded as traitors or worse.
The oil-producing nation is now effectively split in two with the internationally recognized Prime Minister Abdullah al-Thinni confined to the east since losing control of Tripoli and a rival administration controlling the capital and its surroundings.
Both governments are backed by former rebel brigades who united to topple Gaddafi in 2011 but have since turned their guns on each other as Libya slides toward a wider civil war.
The heavily armed groups have been fighting on different fronts for territory and control of oil ports. Hundreds of civilians have been killed and 400,000 displaced inside Libya since the summer, according to the United Nations.
With the country polarized between the two rival factions who dismiss each other as traitors, terrorists or war criminals, many Libyans explain that, as in the Gaddafi era, it's best to say little and avoid trouble.
"I keep politics at home," said an entrepreneur who gave his name as Mahmoud. Like other Tripoli residents interviewed he preferred not to use his full name for fear of reprisals.
"You don't want to get into trouble criticizing the government or armed groups," he said, sitting with family members in the large reception room of their Tripoli home. "In Libya the political atmosphere is now you are with me or against me."
Diplomats and foreign companies have mostly pulled out of Tripoli since the summer when Dawn forces battled rival armed groups to drive them out of the city in weeks of rocket fire and shelling that destroyed the airport.
Human rights activists, journalists and supporters of Thinni or of an armed group from Zintan, which was expelled by Dawn, have fled the capital after facing threats or attacks, Amnesty International and Human Rights Watch have said.
Rights groups have also documented similar cases in the east, where Thinni has allied himself with Khalifa Haftar, a former general who has used war planes to attack civil airports in his self-declared battle against Islamists.
Fearing for their security, supporters of Libya Dawn have escaped to Tripoli from Benghazi and other eastern cities where they say they faced persecution.
"I didn't feel comfortable any longer," said a journalist who was based in Benghazi until September. "You can't criticize Haftar or you get framed as an Islamist."
With people avoiding talking about politics, the debate in Tripoli has shifted to walls, where both sides attack each other with graffiti -- a legacy from the 2011 uprising against Gaddafi when scared residents sprayed slogans at night.
"No to Karama", is written on one wall, referring to Haftar's campaign against Islamists. Someone else has overwritten the "no" and added "yes". Yet another spray-can artist added "Libya Dawn" next to "Haftar".
Focus points for Karama graffiti are the central district of Fashlum and the Tajoura suburb, areas which revolted early against Gaddafi. But there is also no shortage of graffiti supporting Libya Dawn or Islamist groups such as the Muslim Brotherhood and Ansar al-Sharia, which is branded a terrorist organization by Washington.
Tripoli's new rulers are trying hard to show that life is normal, inviting foreign journalists to visit. Some African and Asian diplomats have returned though they avoid dealing in public with the non-recognized government.
Some foreign businessmen stayed, but there is little activity as money transfers out of Libya are very difficult. The central bank is trying to conserve its depleted dollar reserves due to a loss of oil revenues because of the fighting.
"I have little to do those days," said Mohamed, head of a company which helped foreign investors with their paperwork. Adding to a sense of isolation is the departure of foreign airlines -- the few foreign connections run by Libyan carriers are booked out for weeks.
More foreigners left last month after gunmen stormed the luxury Corinthia hotel, killing nine people including an American and a Frenchman. The hotel had been the main venue for delegations still visiting Tripoli.
The other main hotels, the Rixos and Radisson Blu, had already closed.
Police have shown a more robust presence in Tripoli since the attack, but many residents prefer to stay home at night with shops closing early and people staying off the streets.
"I don't go out much at night any more to visit my friends," said a Libyan government employee. "Either I sleep at a friend's place or I leave very early."
(Editing by Patrick Markey and Giles Elgood)