THE SEARCH FOR A MIDEAST TRUCE : Battle-Tested Beirut Barely Blinks at Latest Violence

Not long ago in this city, people stepping out the door in the morning had no assurance they would ever make it home again.

Militia fighting, car bombs, snipers and kidnappers blended into a dangerous chaos that made every resident an unwilling player of Russian roulette for the 15 years of Lebanon’s civil war.

Survival instincts honed during that period may have lain dormant during Lebanon’s six years of peace since 1990, but it took just a whiff of trouble over the past two weeks to bring the old spirit back among the 1.2 million people of Beirut.

Israeli planes have knocked out the city’s power stations? No problem--turn on the private generators, never dismantled.

Attack helicopters are bombing Hezbollah outposts in south Beirut? Shop downtown.

Potential foreign investors are too frightened to come? Reschedule them for next month.

“Whenever we have a new challenge, we function very well,” said May Zouid, spokeswoman for the private corporation Solidere, which is rebuilding Beirut’s war-devastated seafront and a vast section of its old central business district, considered the largest urban-renewal project ever.

Since Israel launched “Operation Grapes of Wrath” on April 11 to counter Hezbollah guerrillas launching rockets into northern Israel, Beirut appears to be coping just fine, despite several direct hits on its economy.

Even as Israeli artillery shells fell on southern Lebanon for the 14th straight day Wednesday, jackhammers were hammering and earthmovers moving in the first phase of Solidere’s reconstruction program.

On Hamra Street, the main thoroughfare, noon traffic was bumper to bumper, window displays of expensive clothes and luxury goods beckoned shoppers inside, and old men studied their newspapers while sipping coffee in the sidewalk cafes.

It’s true that business is off, said jeweler Abdul Majid Nasser looking over glass cases glittering with gold. But he says it will rebound as soon as peace returns.

Once known as the Paris of the Middle East and now determined to earn the title again, Beirut had always mixed French flair, Mediterranean sun and the scent of an Oriental bazaar.

It was a pleasing combination, until the state disintegrated into ethnic and religious factions. Christian and Muslim militias turned on one another. Palestinian fighters began attacking Israel from Lebanon, and Israel invaded in 1982. After a decade and a half of bloodshed and 100,000 deaths, a 1990 Arab summit restored a semblance of order.

Considering what this city has lived through, residents say, it is unimaginable that the current fighting between Hezbollah and Israel will keep the capital from rising again.

“We have recovered from a very serious crisis that lasted for over 15 years. There is no reason why we should not be able to do that again,” said former Prime Minister Selim Hoss in an interview Wednesday. “But damage has been done.”

The recent fighting has severely affected the Lebanese economy. The government estimates at least $300 million of damage and wants Israel to pay compensation.

Central Bank Governor Riad Salameh predicts the country’s annual growth rate this year will be cut just about in half, to 2% or 3%.

Work on two major construction projects halted last week because of fear of more air strikes. One is a 50,000-seat sports stadium that must be completed by September to serve the scheduled Arab Games, and the other is an extension of Beirut International Airport that Prime Minister Rafik Hariri sees as key to helping bring back tourists from Europe and the Middle East.

Both happen to be near the southern suburbs hit five times in eight days by Israeli planes and by helicopters targeting the leadership of the Shiite Muslim Hezbollah.

Repairing two bombed power stations outside Beirut could take up to 1 1/2 years. After the stations were knocked out last week, the state electric utility was forced to limit power to four hours daily--a blow that particularly hurt because full-time electricity had been restored to the city only in January after almost 20 years of off-and-on service.

Hariri charges that the Israeli offensive is aimed largely at undermining the reconstruction campaign. The attacks began days before Lebanon was to float a $100-million bond issue in Europe, a sale that was postponed.

The government says Israel drove as many as 500,000 residents out of southern Lebanon to strain government resources. Education has been interrupted because schools are being used to house displaced civilians. A partial naval blockade and gunboat attacks on the main coastal highway are hindering internal and foreign commerce.

Nevertheless, a diplomat stationed in Beirut said he had no doubt about Lebanon’s long-term fortunes. “It’s the most extraordinary country in the world. They’ll get around it somehow, somewhere--and life goes on.”