By Mariam Karouny
DAMASCUS (Reuters) - With the enemy at the gates, Bashar al-Assad was dining out.
The sound of gunfire and explosions carried to central Damascus as his troops clashed in the suburbs last Saturday with rebels who had seized towns near the capital. Masked gunmen erected checkpoints on the city outskirts.
But Syria's 46-year-old president, outwardly unfazed, put on a show of business as usual for fellow patrons of the smart downtown restaurant where he spent the weekend evening.
"He hasn't changed his lifestyle," said a politician from neighboring Lebanon, a regular visitor to Syria, who has met Assad several times since the Syrian uprising began last March.
"He spent the evening at a Damascus restaurant," he added, speaking privately to Reuters about the president's movements on January 28, when the appearance of forces flying flags of the Free Syrian Army at the very edge of the capital had some, excitable, observers reckoning Assad's life expectancy in just weeks.
Memories of the late Muammar Gaddafi were quick to surface.
Yet there was more to his projection of insouciance than the bravado of madness or despair. Others, too, have described to Reuters a Syrian head of state fully abreast of events on the ground - not the mere puppet of hardliners that some have portrayed - "relaxed and phlegmatic", and determined to see off the challenge, offering some reforms, strictly on his own terms.
While few rate his long-term prospects highly, all is not lost, at least for now. Assad's troops swiftly drove back the more lightly armed rebels from the outskirts of Damascus and many foresee a long struggle yet for a country, at the heart of the Middle East, that is trapped in a "balance of weakness".
Pockets of territory are in open revolt, the economy is choked by sanctions and fellow Arab leaders have joined the West in demanding he quit. Yet Assad retains considerable strengths: he has military reserves; allies that include Iran and Russia; grudging consent from millions afraid of Iraq- or Lebanon-style chaos; and he can count on die-hard support within his Alawite religious minority, who fear a sectarian bloodbath if he falls.
Since people in the city of Deraa first took to the streets nearly a year ago, inspired by Arab Spring risings elsewhere to demand freedoms, and were met with the ferocity that is the mark of four decades of rule by Assad and his father, Syria has been virtually closed to reporters from the outside world.
With the Arab League pressing for openness, Syrian officials have now given journalists limited access. Reporting last week, under surveillance, from Damascus, Deraa and the rebellious city of Homs, Reuters nonetheless found Syrians willing to evade, or defy, secret police minders and to condemn the Assad government.
There was a climate of fear and despair, as businesses suffer and people talk of mysterious disappearances, blamed on shadowy forces fighting both for and against the status quo.
An outwardly diffident ophthalmologist with a London-born wife, who was thrust to the fore only by the car crash that killed his elder brother, Assad has promised reforms to the Baathist one-party state developed over 30 years by his father Hafez. But he has insisted strictly on his own terms and rejects the demand last month of the Arab League that he step aside.
"No, no, no. Never," his Lebanese acquaintance said. "He will not resign even if the war lasts 20 years." Assad, he added, was fully engaged with "events on the ground".
A Western diplomat quoted another recent visitor to the presidential palace as finding him "relaxed and phlegmatic", busy on his iPad, asking about the prospects for an Israeli strike against Iran and apparently confident he could outlast his foreign critics, just as his father did for 30 years.
But unlike the elder Assad, who crushed an armed Islamist uprising in the city of Hama 30 years ago this week, killing many thousands, Bashar faces opponents who are entrenched across the country and hardened by a military crackdown on protests.
A visit by a group of foreign journalists to the eastern suburbs of Damascus last week highlighted how much Assad's authority has eroded since the protests started, despite the shooting of thousands of demonstrators, mass arrests, torture and killings in custody and open warfare on mutinous army units.
A year ago, it was unthinkable for Syrians to criticize their leader in public. But here now, just 15 minutes' drive from central Damascus, masked gunmen fighting to overthrow Assad were manning a checkpoint across the road and stopping cars.
The scene evoked another country - Iraq during the sectarian conflict which followed the U.S. invasion that toppled Saddam Hussein, or Lebanon during its ruinous 1975-90 civil war.
The day after the journalists' visit, Assad sent more than 2,000 soldiers to seize back control from the rebels. The fighters were pushed back, but their defiance was infectious.
"There is no force on earth that will make me accept him as a president," said Hend, a housewife in her late 40s who spoke to Reuters in Barzeh, a district on the outskirts of the capital. Like most of the people Reuters interviewed in Syria, she did not want to be identified for fear of reprisal.
"He's not my president and never was," Hend added. "I just couldn't say so before."
Assad, appointed in a quasi-monarchical dynastic succession when his father died in 2000, rules a country which has been controlled by a network of at least 13 official security bodies.
Most Syrians can relate horror stories of the powerful intelligence services that have detained many tens of thousands of people. Memories of their suffering endure, perpetuated through the years of repression in a population that numbers 23 million, double what it was a generation ago in the late 1980s.
In Deraa, where the uprising first erupted, near the southern border with Jordan, Assad's forces have reasserted control militarily. But there is little evidence they have won over the hearts of the people.
Teenage girls leaving school shouted "Freedom! Freedom!" as journalists passed by. Many local people cast openly angry looks at security men who were accompanying the reporters. Graffiti calling on Assad to go was still visible, despite obvious attempts to paint over it.
The security detail in plain clothes appeared uncomfortable escorting visitors up to the Omari mosque, focal point of the Deraa revolt, and most hung back and watched from a distance.
The message from Deraa seems clear: a military offensive can silence people but it will not dampen their anger. Rather the reverse, in a town where it was the arrest of schoolchildren who daubed slogans inspired by Egypt's uprising that sparked revolt.
"When the dust of battle clears, the blood spilt on the streets will make it difficult for Assad to rule as he did before," said a Syrian opposition figure during a secret conversation with Reuters in Damascus.
"Those who are against him now will always be against him."
Another opposition activist said Assad, who he described as wary of triggering tougher international action against him or of giving too much power to his army commanders, had held back so far from using the overwhelming force at his disposal.
"The regime could finish things off militarily," he said. "But it doesn't want to pay the political price.
"Eighty percent of the army is still in the barracks. He doesn't want to give the army command greater powers."
Ever since the long-overlooked second son took on his late father's mantle, there has been persistent speculation about the balance of power within the secretive ruling family and its entourage and over whether Bashar had liberal leanings that were held in check by the likes of his feared younger brother Maher.
However, diplomats, officials and other observers generally concur that the president is today a force in his own right, committed to hanging on to power on his own terms.
What that determination could mean in terms of continued conflict was visible in Homs. It is ravaged by fighting between Assad's forces and rebels, as well as clashes between majority Sunni Muslims and members of Assad's favored minority Alawites.
Loyalist soldiers and rebel gunmen manned sandbag barriers and checkpoints in rival power bases. Streets were deserted and strewn with litter. Walls were marked by bullet holes.
Just a few streets from a government checkpoint, the rebels' green, white and black flag fluttered. A burnt-out armored vehicle sat deserted, sandbags were scattered, signs of a fierce battle in which the army seemed to have taken casualties.
Graffiti told a story of stand-off:
"Down with Assad" was written on one wall;
"God, Syria and Bashar only" declared a slogan opposite.
Journalists were taken by officials to visit a military hospital and a single street before being told to leave after just 10 minutes - authorities could not ensure their safety. Two weeks before, a French journalist was killed in clashes in Homs.
Despite the close attention of government minders, one young man dared to approach a Reuters reporter in full view of them: "Come with me," he whispered. "I'll show you what the security forces are doing to the city.
"They will come after me later," he added. "But I don't care. My life is nothing compared to the sacrifices of others."
The defiance in Homs compares with the pervasive sense of foreboding in Damascus, where many people are simply staying at home as much as possible, alarmed by stories of mysterious gunmen in the streets and unexplained disappearances.
One man, Nabil Haddad, spoke of one such incident he had heard of, which has evoked fears of the kind of civil war that saw hundreds of thousands of Iraqi refugees flee across the border to Syria over the past decade:
"My friend was stopped at a checkpoint outside Damascus," said Haddad, who is in his 30s and works in business. Speaking at a restaurant in the capital's walled old city that is popular with the moderately well-off middle classes, he went on:
"Men in civilian clothes told him his wife should go with them to the police station, and he should go and get her papers from home.
"So he did, and then went to find her at the police station - only to be told the police had not erected any checkpoint on that street and had never heard of his wife."
Throughout the capital, luxury and boutique hotels are almost empty, while market traders say business has dried up.
The year of unrest, coupled with Western sanctions on Syria's crude oil exports, has plunged the economy into deep trouble, depriving Assad of $2 billion in oil revenues and suffocating tourism, another vital source of income.
Trade has collapsed and businesses have closed or slowed operations as parts of the country have been shut down by the violence and basic functions of the state like tax collection have ground to a halt in some areas.
The Syrian currency has fallen nearly 20 percent, to 58 pounds to the dollar. Economists say authorities are reluctant to keep spending billions of dollars to support it.
Away from the banks, on the black market, the fall has been steeper. The rate is now 70 per dollar. "We're worried that soon it will be 100. This will be a disaster for all of us," said one trader in the ancient Hamidiyeh market, which a year ago bustled with tourists but now looks forlorn and deserted by customers.
Now, Iranian tourists, many of them on pilgrimages, are almost the only foreigners. Merchants say business has collapsed and Syrian shoppers are tense and gloomy.
"Everything we are getting is local now. We cannot find imported goods," said Fadwa Fahham, a Damascus housewife who complained food prices have doubled and heating fuel is scarce.
In the gold souq, shopkeepers say sales have fallen. Those who do come are not buying for a special occasion, but to invest in something that may hold its value in a time of crisis.
"These days people are buying to save for worse times ahead," said one of the jewelers, who did not want to be named.
"We are now like Lebanon - we are an arena for conflict," said Khaled, another resident of Damascus who spoke to Reuters privately. "There are political interests at play and every country has a say now in Syria's crisis."
Assad's supporters are confident their president will crush the revolt, which they say is destroying the country. They speak of a silent majority upon which Assad can count.
His forces are still overwhelmingly stronger than anything his opponents can muster, Western and Arab powers have ruled out military intervention of the kind they deployed in Libya, on the fringe of the Arab world. And he enjoys support from Iran and Russia, a veto-wielding member of the U.N. Security Council.
But Moscow could reconsider its political and military ties with Syria, which date back to the Soviet era, if it judges that Assad's position is untenable. And even his sympathizers in the region expect Syria to slide deeper into conflict.
"For sure, Syria is heading for civil war, sectarian war - if it hasn't already broken out," said the Lebanese politician who is broadly supportive of Assad's rule.
"The Alawites see it as a battle for survival."
For the time being, Assad's support base remained solid, despite the defection of thousands of army conscripts and growing numbers of officers, many from the Sunni majority.
"It's not a disintegrating state," the Lebanese politician said.
But the prospect of an extended stalemate between the two sides, described by an opposition figure in Damascus as a "balance of weakness", fills many Syrians with dread.
"Before, I used to wonder when I watched the news from Iraq, how could this happen? How could people kill each other?" said Ali, a student in the capital. "But now I know that is possible - because it might happen here."
Even some of those who supported the early protests, exhilarated by the calls for reform and inspired by their Arab neighbors, say the bloodshed - and emergence from the shadows of hardline Sunni Islamists who disdain secular liberals and religious minorities alike - cast a shadow over their uprising.
Nonetheless, after two generations of repression under the Assads, they believe there is no going back now, however long - and it may indeed be long - it takes.
"The dreams of my father were crushed by the regime. Now that we have the courage to challenge the regime, the bullies have stolen the revolution. It does not represent me now," one leading pro-democracy activist said - quietly - in Damascus.
"But whatever happens, I will not accept Bashar".
(Additional reporting by Laila Bassam in Beirut; Editing by Dominic Evans and Alastair Macdonald)