KYOTO, JAPAN -- In the depths of World War II, U.S. military commanders decided to spare this venerable city from bombing raids because of its rich religious and cultural heritage. But now the antique charm of Kyoto's graceful pagodas and imposing castles is falling to a force more powerful than bombs: Japan's voracious real estate speculators.

The skyrocketing price of land, already recognized as a major economic and political problem throughout Japan, has become an environmental concern as well here in the ancient capital in southern Japan, north of Osaka. A jumble of hotels and office and apartment buildings is stealing the cityscape once marked by the curved roofs of tall temples rising above swaying stands of bamboo.

At the famous Kikokutei garden downtown, for example, a stone marker next to a quiet pond called "Reflect-the-Moon Lake" recalls a time when the Emperor Meiji sipped tea at a spot on the water's edge where he could raise his eyes to view the full moon above the distant mountains.

Today, a visitor who raises his eyes from the same spot will see the towering gray and yellow hulk of a cut-rate love hotel, complete with a giant TV satellite dish on the roof. The effect is roughly the same that a Washingtonian might feel if a high-rise motel went up between the White House and the Washington Monument.

"A city that was saved from American bombs is being destroyed by Japanese greed," complains Mayumi Okada, a citizen activist who has waged a largely futile battle to preserve traditional Kyoto. "People will put in any trashy thing because everybody wants to cash in while the money is good."

The money has been good in real estate all over Japan for the past five years because of the infamous land "bubble" -- the stunning increase in prices that has seen shabby buildings the size of a two-car garage command $1 million or more in some cities.

It can be misleading to describe the land bubble in terms of dollars because the U.S. government's policy of weakening the dollar tends to exaggerate any price figure converted from yen. But the land bubble is one of the key reasons Japan's enormous trading wealth has not yet given ordinary people a wealthy way of life. So much must be paid for even a tiny apartment an hour or two away from downtown offices that the overall standard of living is depressed.

And it has proven to be a tenacious bubble. Whenever the real estate market is held down in one place, it tends to pop up somewhere else.

Kyoto, the political and religious capital for some 1,100 years and one of the few big Japanese cities that could be described as charming, was a latecomer to the land boom. When government restrictions and market resistance slowed the price growth in, Tokyo, the current capital, investors began flocking here.

"Kyoto is the best brand-name in real estate right now," said Takeo Chigusa, a sales manager at Asahi Home Builders Inc., real estate developer. "It has a terrific image because everybody learns the history in school. People buy condominiums here and never live in them; they're just waiting to take a profit when the price goes up."

Chigusa's latest project is a six-story building where an apartment with a single bedroom roughly the size of a walk-in closet in the United States sells for $377,000. Rising just eight feet from the wall of an ancient Shinto shrine called Umemiya, the white condominium dominates the landscape, obliterating the quiet and isolation of the temple garden that has been used for centuries for meditation.

The temple priests and some neighbors charged that the tall structure violates Kyoto's scenic preservation ordinance. The complaint was rejected when city officials concluded that the ordinance covers only the temple grounds and stops at the wall.

There have been people and institutions in Kyoto who cashed in handsomely. The 399-year-old Shokaku-ji Buddhist temple, burned in a 1965 fire, was a charred one-story hulk on a quarter-acre plot until last year.

"It was about five years ago when the jiageya {speculators} started telling me I could make a billion {yen} on our burnt temple," said a smiling Ryoshun Hijikata, Shokaku-ji's chief priest. "And sure enough, last year Sumitomo Bank lent me enough money on my land to put up a 1.4 billion yen {$10.7 million} building."

Today, the old Shokaku-ji is alive again as a "high-rise temple," luxuriously ensconced on the fifth floor of the red steel building. The temple's main chapel, an enormous open room of crisp new rice-straw matting, features massive pillars carved from mountain oak and sparkles with gold and silver ornamentation.

The whole idea of a bright red high-rise temple is anathema to cultural preservationists like Okada. "They are destroying the old beauty of our city and its old culture, too," said the indignant woman.

She cited the 800-year-old August ritual -- as central to Kyoto life as the Fourth of July fireworks in American cities -- when a giant Chinese character -- the word "dai" -- is burned on the side of a mountain east of town.

"When I was a child," the 51-year-old Okada said, "you could see that big 'dai' from anywhere in Kyoto. Now people have to line hours ahead of time just to get a place where the buildings don't block their view."

The economic and environmental impacts of the land-price spiral have prompted considerable concern within the federal government in Tokyo. On the local level, though, city officials have not been active.

"It is hard for the city to stop real estate companies from bidding up land or building new buildings," said Senichi Oyama, Kyoto's planning director. "The investors say to us {that} they paid a huge amount of money for this land, so why can't they develop it like they could in Tokyo or Osaka? This makes for difficult discussions."

"It used to be," said Shinyu Katakata, a professor at Kyoto University, "that our city had a wonderfully broad open sky. But now all this land is worth so much money. People are getting richer, but our skies are getting narrower every day."

Special correspondent Shigehiko Togo contributed to this report.