By Lorraine Adams. Knopf. 292 pp. $23.95

The image at the heart of Lorraine Adams's luminous first novel is a mysterious storage locker outside Boston rented by illegal Algerian immigrants who may or may not be terrorists. Concealed within it are stolen goods, for sure, but is there something worse? For a long time we have no idea.

Neither does the story's protagonist, Aziz, a young Algerian refugee who enters Boston Harbor as a stowaway in the hold of a tanker. Starving and weak, he arrives in a dazzling and perplexing country where he doesn't speak the language and soon finds shelter in a ratty communal apartment crowded with a fluctuating assortment of fellow Algerians, most of them illegal, too. Some are petty criminals; some may be more than that. There's the scammy but charismatic Rafik, who's fencing stolen goods. There's Rafik's gullible American girlfriend, a zaftig, BMW-driving secretary. There's Rafik's violent criminal friend Kamal, who's clearly up to no good. Everyone's got an angle.

Aziz gets work as a dishwasher in a Mexican restaurant whose owner regularly kicks him in the shins for talking too much. He and his friends go clubbing in shoplifted suits, fall in love, try to figure out American body language and slang and often get it wrong. They get fake papers, commit minor insurance fraud, live on the edge, always terrified of the authorities. Adams draws her characters with compassion and humor, taking us inside their heads by means of an invented idiom crafted from her protagonists' fractured English and fluid Arabic cadences, at once poetic and deliberately ungainly: "But Rafik this early was asleep," Aziz thinks. Or "the acrid of bus bellied up to them."

But this isn't the tale of an innocent abroad. Though Aziz first seems to be a wide-eyed naif, a series of carefully calibrated flashbacks reveals the horror from which he has fled, the Islamic terrorism bred by Algeria's decades-long civil war. In a few scenes of heart-stopping atrocity, rendered in chillingly spare prose, we see the horrors that Aziz himself was forced to participate in. It's as if these buried memories refuse to stay buried. Shortly before Aziz escapes Algeria, his brother observes, "You are hunted."

Before long, Aziz is hunted here, too. Boston Harbor, with all its symbolic connotations of liberty, turns out to be icy -- "water never warms in American harbors," Aziz reflects -- and no safe harbor at all. As the Boston field office of the FBI becomes convinced that this loose collection of Algerians is in fact a tightly coordinated terrorist cell, Aziz and his fellow immigrants find themselves under surveillance. And once the investigation is set in motion, the microphones and microcams planted and the vans in place, it must follow its relentless logic to a tragic conclusion.

Adams, a Pulitzer Prize-winning reporter who has covered the FBI for this newspaper, presents a rather scathing view of the agency's counterterrorism agents. Fueled by fear and suspicion, they are bullies who torment the innocent while letting the guilty go free. They're almost as clueless in their way as the Algerians they're following. Adams shows us the deep ignorance on both sides, the unquestioned and deeply rooted assumptions, and the murkiness of allegiances among refugees from a country torn by a bloody reign of terror, a place no intelligence agency can ever hope to fathom. As Aziz points out: "The CIA has no one in Algeria. If they did, how would they tell who is who? I am Algerian, and I could not tell."

This story, though set shortly before Sept. 11, has a post-Sept. 11 sensibility: It is quickened by the reflexive suspicions we've acquired, even as it challenges them. But Harbor is no apologia for terrorism. Adams is far less interested in the making of a terrorist than in exploring her characters' inner lives. The elegant architecture of her narrative is designed to illustrate the clash of cultures, the way we fail to understand Islamic immigrants just as surely as they're unable to understand us. In fact, it's barely a novel about terrorism at all. Instead, it is firmly rooted in the rich tradition of the immigrant novel, the novel of America as seen through alien eyes. Adams's Algerians call to mind the Lower East Side immigrants in Michael Gold's 1930 novel Jews Without Money, or Amy Tan's Chinese, or Oscar Hijuelos's Cubans or Jhumpa Lahiri's Indians. The world may have altered dramatically in the last couple of years, but the story of the stranger in a strange land -- baffled by America and baffling to us -- endures. In the end, her immigrants prove as elusive, as unknowable to the natives around them as the contents of their U-Stor-It locker. *

Joseph Finder is the author of several novels, including "Paranoia" and the forthcoming "Company Man."