No wreckage hints that Baghdad was ground zero for wave upon wave of allied bombers during the gulf war two years ago. Or that a factory on its outskirts was obliterated just last week by $40 million worth of American cruise missiles. Even the luxury Al-Rasheed hotel, where a wounded cruise landed in the garden at the beginning of the week, was mostly repaired by Thursday, ready for business as usual.

War. Reconstruction. More war. That is business as usual for Saddam Hussein’s Iraq. The cycle has gone on now for more than a dozen years, and despite some sudden Iraqi peace overtures to Bill Clinton, it is likely to continue. As one senior official in Baghdad told NEWSWEEK, Iraq may want to do business with the rest of the world, but ultimately it has no intention of bending to the demands of the United Nations, the United States or anyone else. After Desert Storm “we accepted a cease-fire, but we never signed a surrender document with anybody,” he said. “What we accepted at the end of the fighting we refused to accept a year later. What we accepted a year later we do not accept now, and what we are accepting now we will refuse a year from now.”

Only hours after Clinton took office, skirmishing resumed. In the northern no-fly zone, U.S. and allied jets attacked Iraqi antiaircraft positions after the Iraqis took the hostile step of turning on their fire-control radar, Apparently surprised, Baghdad asserted it had done nothing to warrant the first attack and claimed it didn’t even have an antiaircraft battery at the site of the second attack. U.S. officials weren’t sure the Iraqis meant to provoke them-but the incidents continued over the weekend with more attacks on U.S. fighters, this time in the southern no-fly zone.

What one Iraqi intellectual calls the “dialogue of bitterness and accusation” continued. In the streets, weary resignation reigned. During one air-raid alert, the national soccer stadium left its lights on and continued play as tracer shells crossed the sky like fireworks. During the cruise-missile attack, a group of painters at the Artists Club ordered another bottle of arrack and kept on drinking, debating and smoking. That same night, a government official was talking to a reporter as the cruise missiles and rooftop guns started their thunderous percussion. The Iraqi glanced out his window, checked to see what CNN was showing and continued the interview to its end.

Saddam Hussein and the men around him regard this kind of cool as courage. The ability to impose order and rebuild the country in the face of adversity is, by their estimation, part of what makes their dictatorship legitimate. “Is there any president who can do this [reconstruction] without the support of his people?” one of Saddam’s aides asks rhetorically.

For the true believers near the top, and perhaps for Saddam himself, such claims may make a kind of mystical sense. The name of their party, the Baath, literally means “resurrection” in Arabic. Their secular ideology has blended Christian notions of redemption with the Islamic idea of martyrdom. To be crushed and to reconstruct, to die and be reborn, may even be a fate for which the Baath faithful devoutly wish. “In less than two years, our people could rebuild the country,” Izzat Ibrahim, a top party official, told a delegation of Muslim fundamentalists last week. “We are people who have a message.”

Few ordinary Iraqis join in the refrain. Exhausted by rhetoric and war, they see themselves as victims of both Saddam and Washington. The allies’ failure to support the postwar uprisings among Kurds in the north and Shiites in southern Iraq has not been forgotten by those who were exhorted to oust the dictator. “After the war, I’ve never seen Saddam so off balance,” said a merchant in the upper-class Mansour area. “They had their chance, but they missed it.” Now Saddam has reorganized his army and tightened his control. “The Iraqi people can’t do anything about him,” says a shopkeeper in the Baghdad souk, “and now I think maybe America, Britain, all the world can’t do anything either.”

Coalitions of exile opposition groups, always low on credibility, have been falling apart over the past two months. Saddam’s men are confident that quasi-independent Kurdistan will collapse if the no-fly rule is ever lifted, and his troops are positioned to take the enclave by force if they get the chance. Scattered rebels in the south have yet to capitalize on the air cover they’ve been given. Many Iraqis fear that, if the rebels do act, the civil war to come will be worse than the dictatorship they already have. A Palestinian resident of Baghdad argues that only Saddam “actually has the skill, the personality and the ruthless will to keep the country together.”

Many of Washington’s erstwhile allies in the gulf coalition are looking to make peace with Saddam, not war. And despite last week’s skirmishes, nothing suggests that Clinton is ready to take on Iraq alone. So U.S. and allied attacks, at this stage, strike many Baghdad residents as mean-spirited potshots, pointlessly increasing their suffering. “If something happens again, reconstruction won’t be so easy,” says a once prosperous intellectual who has spent his savings trying to weather the past two years. “This time, when it resumed, people were really terrified that [George Bush] was going to attack our electricity and our water supply.”

To keep Baghdad’s services going in spite of the sanctions, the country has cannibalized itself. Diplomats report that in remote villages, government teams have simply stripped away the wiring and other infrastructure components to use in more important places. For the trains to run at all, damaged engines are stripped to provide parts for those in operation. Saddam and his cohorts are not oblivious to these privations, merely immune to them. Their resolve is strengthened by the conviction that eventually the world will come to them. “A country with 150 billion barrels of oil in the ground they cannot just scratch off their calendar that easily,” a senior official says, exaggerating the size of Iraq’s reserves.

So in the first minute of Clinton’s presidency, Iraq officially declared a unilateral cease-fire and suggested a honeymoon. Long-delayed U.N. inspectors were welcomed with unprecedented hospitality. “There is a spacious span of time, extending to several months, provided for the new American administration to reconsider all previous hostile stands and measures,” said the official newspaper Al-Iraq. Almost disdainful of the airstrikes in the north, Baghdad waited to hear what it wanted to hear: that the rest of the world is giving in.