By Vivienne Walt ~ TRIPOLI 

I call a business consultant in the Libyan capital on the telephone, and ask if he wants to join me at the café where we shared a long, relaxed lunch last year. His response is nothing I’ve ever heard from him before: terror. “Vivienne,” he says, breathless and garbled. “I cannot talk to you. They are arresting people who speak to foreigners. Our calls are being listened to. Our e-mails don’t work,” he says, then blurts out apologies and says goodbye.

So it goes in Tripoli. As Libya’s three-week popular revolt morphs into an all-out civil war, this city of about 1.6 million people is poised between frenzied panic and humdrum normality. With no sense of how drastically their lives might be upended tomorrow, the next day or next weekend, there is fear and loathing about the mounting disaster — and yet a sense that the spectacular violence to the west and east of Tripoli is somehow unfolding in another country.

And in a sense, it is another country. Tripoli, Libya’s economic and political powerhouse, and the stronghold of Muammar Gaddafi since he seized power nearly 42 years ago, is now the surreally calm eye of the storm in an outsize global drama. Gaddafi is holed up in his complex on Tripoli’s western outskirts, venturing out every few days to appear on television, or atop the parapet of the Red Castle monument downtown, vowing to crush pro-rebel Western countries and al-Qaeda fighters, who he insists are leading the revolt.

Along Tripoli’s breezy harborside, fishermen still sell their day’s catch, offering glistening sea bream and bass out of cardboard boxes. There are traffic jams in middle-class neighborhoods, as people go shopping for everything from sneakers to cell phones. Yet business is proceeding at a snail’s pace, with thousands of people not working for weeks, since almost every expatriate has exited the country. That lends Tripoli a deceptively languid air. A group of boys play soccer in a field in one neighborhood. In another, a soldier allows a laughing 3-year-old boy to hold his Kalashnikov rifle and pose for a photograph.

And yet less than an hour’s drive west, Gaddafi’s military on Tuesday pummeled rebel positions in Zawiyah, a town of 200,000 people next to a crucial oil refinery about 30 miles from Tripoli. Scores have been killed and hundreds injured in about five days of heavy shelling and gunfire in the town, according to hospital doctors, as government forces fight a vicious battle to recapture the town from rebels. The battle for a town virtually on the doorstep of Gaddafi’s capital has become a key testing ground for the regime’s ability to survive the uprising. State-run Libyan television reported on Tuesday night that one of the military’s commanders in Zawiyah, Major General Khaled Shahma, had defected to the rebel side — suggesting that the government still faces intense resistance despite its superior firepower.

At 11:15 p.m. Tuesday night, Gaddafi’s motorcade roared up the long driveway of the hotel in central Tripoli, which houses about 120 foreign journalists who have been especially invited to the capital by the regime. Out stepped Gaddafi, his fist pumping the air triumphantly as he strode through the revolving doors, smiling delightedly as he was mobbed by television cameras and reporters. It was theater, of course: the Turkish and French television crews scheduled to interview him would have gone to any location to which he summoned them. Instead, Gaddafi, dressed in a black winter coat and tan desert turban, chose the open, public exposure, as if to say, “I still own this town.”

Still, as the war inches ever closer to Tripoli, the capital betrays no sense of siege — at least on the surface. On Tuesday morning there were long lines outside the few bakeries that had reopened; many had shut when their foreign workers, mostly Africans, began to flee Libya’s spiraling violence in droves, and as Tripoli erupted during the past few days in wild celebrations — yes, celebrations, since Gaddafi declared on state-run television last Sunday that the battle had been won and the rebels defeated.

Apparently unconvinced by the Brotherly Leader’s rosy view, some residents say they are bracing for bad times, even as the semblance of normality takes hold. “Every day the crisis is less and less,” says Rajab Yamani, a professor of gynecology at the Medical College in Tripoli, as he waits to buy a bag of bread rolls in a neighborhood near downtown. “The worries are not about tomorrow, or the day after, but longer term,” he says, adding that there is deep concern about how Libya will finally emerge from the conflict. “The problem is psychological.”

But people shrugging off the war might be like whistling in the dark. Just below the surface, there are signs everywhere that this is a city frozen in time.

For one thing, the government shut down all Internet connections throughout Libya last Thursday as it launched its assault on Zawiyah. Mobile-phone text-messaging has not worked in weeks, as the government attempts to snuff out communications among antigovernment forces.

In the lobby of the Burj al-Fatah tower, which houses Libya’s Investment Authority (whose assets were frozen last week by the U.S. and E.U. countries), the newsstand, perhaps the finest in Tripoli, is still stocked with copies of the Financial Times, the International Herald Tribune and TIME magazine. But look closer: their most recent date is Feb. 16 — one day before the revolt exploded after protests in Benghazi. After that, Libyans have not been able to buy a single printed word concerning the revolt in their country. The most recent issue available of Libya’s Business Post magazine is from February, featuring articles about the new business-class service on Air France flights from Tripoli — suspended three weeks ago — and a huge new wind-power plant in the eastern city of Darna, which now lies in rebel-held territory.

That magazine now seems like an ancient relic — but then, residents are accustomed to ancient relics, living in a city with the spectacular ancient Roman cities of Leptis Magna and Sabratha short distances away. In the Red Castle museum of antiquities, Salah al-Agab, head of the department of archeology in Tripoli, says the museum’s collection of ancient Roman artifacts, dating back thousands of years, has key lessons for the 21st century residents who converge daily outside the castle’s stone walls to chant their devotion for Gaddafi. “From this fortification you can see that Libya has faced many conspiracies throughout all time,” al-Agab says, standing in the entryway of the old building on Tuesday morning. “We hope all people can work together to find a solution to this problem.” Even as those in Tripoli carry on regardless, holding their breath and hoping for the best.

Read this story on TIME Magazine.