Lahore's street of dancing girls, fabled in song and story as the most glamorous and beguiling red-light district of the Mughal empire, still survives despite the new puritanism of Pakistan's drive for Islamization.

At exactly 11 each night, shuttered doors along the street are flung open, revealing the heavily made up and bejeweled dancing girls within. They sit in pairs on cushions or sofas in small, drab rooms with their musicians and business agent, usually an older women who used to be a dancer herself, waiting for customers.

The girls with second-story rooms sit on balconies overlooking the street, smiling down at the men passing below. There is none of the hustle here of Bangkok's blocks of massage parlors and topless bars or of Washington's 14th Street corridor. By tradition, rather than government puritanism, it is all very discreet.

But the government of President Mohammad Zia ul-haq has moved in to vastly reduce the number of hours the street can operate. Instead of closing the dancing girl dens, they are restricted to two hours a night -- from 11 p.m. to 1 a.m. That, along with new strict bans on prostitution enforced by public floggings, has served to reduce the number of customers who visit here.

"It's a shadow of what it used to be," said a middle-aged Pakistani. Making his first visit to the street in many years, he recalled playing a sitar at houses there during its modern heyday 25 or 30 years ago, when the rooms glittered and the most beautiful dancing girls in the country entertained Pakistan's leading business, military and political figures.

The street does look kind of shopworn, but it is a minor miracle that it continues to operate considering the current climate of the country, where the government is moving to ban the use of women as models in television and magazine advertisements, and women TV newscasters now must cover their heads with scarfs when they appear on the air.

The street of dancing girls, however, is deeply rooted in the history of the Indian subcontinent, which from about 1530 to 1760 was ruled by Mughal emperors with Lahore as its political, cultural and artistic capital. Then as now, the red-light district stood near Lahore's massive red fort and the city's main mosque, one of the largest and most magnificent in the Moslem world.

"This is the way things were during the Mughal days," said one Pakistani businessman. "The red-light district, the fort and the mosque were all together. The young princes who lived in the fort liked to play while the older ones liked to pray."

From that time on, visiting the dancing girls was "one of the most respected pastimes of the aristocracy," said a Lahore attorney. Many of the young princes, or nawabs, of the Mughal empire received their training in manners from the courtesans who also plied their trade as dancing girls, or nautch dancers as they were called.

To a limited degree, the custom of respectable business and professional men going out for a night on the town to the street of the dancing girls still holds, but the dancing girls complain that it happens with decreasing frequency these days.

Occasionally businessmen will hire a fancy house with well-known dancers for a night's entertainment. And no questions were raised in their households when a visiting American gathered a Pakistani writer and a businessman, both married with children, to join him in a tour of the red-light district one recent night.

The neighborhood of the dancing girls -- called hira mandi, or the diamond market -- feels like a Pakistani version of New Orleans' Bourbon Street or New York's 52nd Street during the jazz era, where music, food and sex mingle in a smoky atmosphere. The smell of spicy food is everywhere. Freshly killed chicken mixed with hot peppers is being fried at one open stall, while at another a man is cooking a mixture of livers, kidneys, onions and tomatoes at a big round griddle. Just across the street, discs of flat breads are being baked in an open oven.

The area pulsates with action while the rest of the city sleeps. Cycle rickshaws and horse-drawn carts, or tongas, both gaily decorated with designs punched in tin, sit in a square, and young boys and girls change old torn money for crisp new bills, keeping a small commission for their trouble.

It is unclear, though, just how much outright sex is actually peddled. Before the Zia government crackdown on prostitution, women were reported to be readily available. Now, according to a local newspaper reporter, there is simply more looking. It is possible, he said, to discreetly approach one of the dancing girls who after hours will go to a nearby room, but the added expense of having to pay to watch an evening of dancing, coupled with the new stringent penalties for engaging in prostitution, discourages both the men and women, the reporter said.

The dancing girls, pretty as they are, certainly do not appear to be trying to entice men to their rooms. Their dress, if anything, is demure -- the traditional Pakistani women's garb of long tunic, called a kamiz, and loose, even baggy trousers called a salwar, with a long scarf called a dputta hung around the neck.

When a group of men enter the small room, cooled by a ceiling fan, the musicians quickly drive out non-paying onlookers and bolt the door. One of the women, the lead dancer, fastens 3-inch-wide bands of jingling bells to her ankles while the musicians -- one playing a harmonium, an accordion-like instrument that sits on the floor, another beating drums called tabla and a third banging metal clappers -- tune up.

A true habitue', called a tumasbeen, literally translated as a merry-go-round but in this case meaning onlooker, reclines on the floor to watch the dancing, which is more traditional than sensuous.

As they move, the two women sing in Urdu, sometimes traditional love ballads but most often these days popular Pakistani songs with a bit of a rock beat. It is all very pleasent and exotic in the true sense of the word, but sexy it is not. In fact, Lahore's bigger hotels have discos in which Pakistani women, many dressed exactly like the dancing girls, move far more suggestively on the dance floor. It may only be a question of time, however, before the Zia government cracks down on public dancing.