The old city of Quebec occupies a stirring site, surely rivaled in North America only by San Francisco as a place to look at and look from. Built on a granite promontary beside the St. Lawrence River, Quebec appears like some fantasy settlement offering breathtaking views.

Nowhere is the viewing better than from the brooding towers of the Chateau Frontenac, the cliff-top hotel that is the center and symbol of Quebec.

The city itself is a tightly gathered array of gray stone buildings that line the narrow streets and seem much older than their 200 or so years. Indeed, a few buildings do date to the 17th century, when fur traders and missionaries made this city. A modern city has spread from the river, but the old city remains bound by massive stone walls with arched gateways and by an 1820s fortress, the Citadel. From its midst, the Chateau Frontenac rises like a castle that must always have been there, its rooms commanding the old city and the river.

Some 300 feet below the walls of city and Citadel, the St. Lawrence River sweeps toward the Atlantic. It provides an active panorama. Cargo ships steam into view hourly, to anchor at the docks or grain elevators, or to be met in slow motion by pilot boats and to beat on upriver toward the Seaway. Ferries swing out to arc across the channel to the opposite bank city of Le'vis.

During our recent stay in the Chateau, an implausibly white Scandinavian cruise ship docked down below. At dusk all its decks and lines came ablaze with lights casting a fireworks glow onto the surging river and the dark buildings, like a sign that a great festival was about to begin. And in this clear northern light, every evening seems worthy of a festival.

Evening darkness comes up slowly from the mountains near Sainte-Anne-de-Beaupre' and the midriver mound of Ile d'Orle'ans. Between them, the river remains a flat silver reflection of the fading sky. At intervals, lights point on in the city and dockyards below, across at Le'vis and in the soft blackness along the shores, all sharp as stars in the brilliant air. Nearer at hand, room lights in the deep-cut windows glow yellow against the shadows of the Chateau towers. To watch the lights appear during Quebec's lavender evening is to sense the absolute fitness of the place: This is an ancient settlement because people have always wanted to stay here.

Chateau Frontenac is one of the world's meetinghouses, the place where everyone stops in Canada. It appears to have grown out of the native rock and has so far transcended the status of mere "hotel" that it is a shock to learn that this symbol of Quebec was built (by the Canadian Pacific Railroad) so recently: most of it in 1898, with the "new" tower added in 1925 for a total of some 500 rooms.

The rooms in the original 1898 sections vary much more in size, layout and de'cor than those in the newer tower, while the latter offers longer views and solid comforts: Beds are new and firm, with excellent reading lamps. The color television is concealed in a handsome wood cabinet. There's a useful desk, and sufficient closet and drawer space for a long stay. Rooms are beige rather than flashily luxurious, but all one's needs are unobtrusively met.

Despite the hotel's earned air of permanence, some things have changed: The Chateau no longer serves high tea. But six nights a week in the Restaurant le Champlain, where the waiters are dressed in period uniforms patterned after clothing worn by the city's founders, a harpist plays softly. The best occasion to sample the breadth of the Chateau's kitchen is the Sunday brunch. An entire gallery-ceilinged chamber is given over to roasts, legs of lamb, spring chicken, crepes (certainement!), eggs Benedict, pate's, Nova Scotia salmon, plus fresh salads, fruits, breakfast breads and dessert pastries beyond enumeration. Plus champagne.

Chateau Frontenac is quite large, with enough facilities to keep one occupied indoors. The atmospheric lobby is a first-class venue for people-viewing. There's a mall of Canadiana shops emphasizing crafts and clothing. There's Holt Renfrew & Co. and others with fine woolens and weavings. On the two lobby levels are several bars and restaurants.

Just outside the lower lobby is Dufferin Terrace, a cliff-side boardwalk that is one of the best vantage points in the city. It's both promenade and gathering place. One weekend, the crowd divided its attention among the sparkling view, a duo of firebrand jugglers and a merry musician on squeezebox. During the long winter, the season of Carnaval when Quebecois take to dancing in the streets and madmen race outsize canoes across the ice-clogged St. Lawrence, the Chateau's guests can go ice skating on the nearby St.-Charles River.

Nearby, a funicular provides a short, satisfying plummet to the river-level Lower Town. It's like being trapped in a runaway phone booth, but it takes you down to Sous-le-Fort Street and a warren of boutiques, galleries, cafe's -- all with upward glimpses of the Chateau riding high above the river.

Other, modern hotels may rise to greater heights, but the Chateau remains the magic heart of a magic city.

Room rates in low season (Nov. 1 through May 1) begin at $74 single and $93 double; in high season (May 1 through Nov. 1) they start at $95 single and $115 double (Canadian dollars). Reservations are necessary. Contact: Chateau Frontenac, 1 Rue des Carrieres, Quebec, Que. G1R4P5, phone (418) 692-3861 or (800) 828-7447.