At sunset, on the terraces of the grand tourist hotels along the crest of the city's Beyoglu district, foreign travelers gather nightly to sip the coolers of their glass -- gin and tonics, scotch and waters -- as they stare out across the Bosporus watching the pinpoint-small lights of Asia wink on.

With the moon casting a silvery light over silent ships gliding into the dark, the talk on the terrace is light and easy -- about bargains found in the bazaar, sights seen or yet to be seen, plans being make or unmade, the usual banter of the tourist.

After a day of heat and confusion, of being shuttled backward and forward, through the city's teeming jumble of streets in order to stand in awe before the glory of Byzantine and Ottoman palaces and mosques, the arrival of night to the foreigner comes with welcome relief. From the heights of Beyoglu it is a moment of almost magic serenity, a time to take in Istanbul's fading beauty and to revel in its sudden appearance of peace.

To the city's permanent residents, the Stamboulis Anatolians, Greeks, Armenians and Kurds who make up its population of 5 million, the tourist's enchanted hour, however, has a very different, and indeed foreboding sense.

"The people of Istanbul have become depressed and frightened," said Sami Cohen, the respected foreigh columnist for the middle-of-the-road Istanbul daily newspaper Milliyet. "The political violence in our streets has affected everyone one way or another."

While terrorist violence, the occasional assassination or bank robbery, does occur during the day, it is at night that the armed gangs truly take over to vie with each other for control of city neighborhoods or to settle accounts with enemies. The countless bodies, often marred by torture, which turn up almost daily around the city, testify to that.

Although the city's shops and bazaars normally close at 7 p.m. shop workers and office clerks now start agitating or finding excuses to leave as early as 6. By 9 p.m., the streets of the city are virtually deserted except or an occasional rushing cab or car and the blue-bereted martial law soldiers who set up checkpoints and patrol the main boulevards with bayonetted automatic rifles.

"Frankly, I don't go out any more after 9 p.m. and none of my friends does either," said one young Istanbul journalist. "My wife and I used to go to dinner with friends at least once or twice a week. Now we stay home and watch television or read books."

Far from heralding the sort of tranquil evening peace of the foreigners' imagination, nightfall, to the Stambouli, is the time of what is casually referred to in converstion as "the anarchy."

Once nighttime for the Stamboulis was a time for socializing with friends, walking the cooling streets, frequenting its many coffee houses, or dining on fresh marmara fish at one of the dozen fine restaurants along the banks of the Bosporus. But "the anarchy" has intervened to alter the city's life style drastically. Not merely a political condition caused by the violent rivalries of dozens of armed political groups of the extreme right and left, the anarchy everyone talks about has become a soul-sapping state of mind for the troubled inhabitants of the city.

Fear of "the anarchy" has all but killed Istanbul's once thriving nightlife. Restaurateurs like Cemal Bibercidn, who runs Pandeli's in the Egyptian market and whose ancestors catered to the sultans of nearby Topkapi Palace, claims business is down 50 percent and that at night he only gets an occasional tourist group bused in from the hotels in one of those "Istanbul by night" tours which somehow still function.

Where once residents could attend about 30 theaters, only about a half dozen remain open. Even the movie theaters along Istiklal Street, the main street of Beyoglu, no longer have shows after dark. And at such old and sleazy nightclubs as the Olympia, after 10 p.m. the bar girls outnumber the few daring clients by four to one.

Tales of fear are numerous. A taxi driver tells of being detained with clients at gunpoint by hooded and armed rightists until they could blow up an apartment building entrance of a rival group's headquarters. An airline clerk tells of seeing a newsstand firebombed before her very eyes as she stood at a bus stop. Few are the people, no matter what part of the city they live in, who have not heard shots in the night as political gangs clash.

Good news here is a low body count in the morning's newspapers.

"Yesterday was a good day: only 10 people were killed," a depressed editor at the daily Cumhurriet said recently to a visitor. "This is the state we have been reduced to by "the anarchy."

The Stambouli character is also being changed.

"People used to be more honest, more open, to visit a lot with their friends, to sing and laugh at night," said Turhan Erguden, a textile industry businessman who was educated at Memphis State University. "Now our friends don't come to visit us, and we don't go to visit them.

"When we do see our friends, we don't laugh anymore. We talk aout bad things: the terror, the economic crisis. We only have bad news to exchange."

In a city reeling from an economic crisis characterized by stagnant business, 30 percent unemployment and inflation twice that high or higher, the only growth industries are reported to be gunshops and security lock manufacturers. As in other cities haunted by terrorism, those who can afford it installed elaborate lock systems in their homes and carry holstered handguns under their jackets when they go to work.

Others are merely trying to flee the city. The U.S. consulate general here has seen requests for visas to the United States double in the past year and the West German consulate reports an increase in the number of Turks seeking to emigrate to the industies of the Ruhr.

Despite the mood of foreboding one gets at each encounter with the Stamboulis -- be they simple peddlers trying to make a few lire in the streets selling clothes from carts or government officials and businessman talking over glasses of tea -- Istanbul's unique vitality has been far from sapped.

By day the city still thrives like a vast anthill of humans, cars, horse-drawn carts, buses and boats, all rushing up and down and around the many hills and along the shores. The fears of the people are drowned out by noise and frenetic activity.

Needle-sharp mosque minarets stretch toward the sky like rockets ready to go off. Domes of old churches and mosques swell over the jumbled rooftops of the city, poking through the grid of television antennae.

Down on the Golden Horn, that famous inlet that divides the old part of the city of Stamboul from the newer Beyolu, the people line up by the thousands, elbow to elbow, fishing for the few fish that have survived the pollutants pumped into the water by 120 factories. In the bobbing black waters, ferry boats, belching thick clouds of black smoke, bob in a frenetic ballet as they ply back and forth across the Bosporus to Asia.

Like few other cities in the world, Istanbul, founded by the Emperor Constantine as New Rome in 329 A.D., is a city of two worlds -- that of Europe, on whose farthest eastern rim it perches, and that of Asia, the land across the straits whence its ancestors and its Islamic religion came. The cross-cultural currents of Istanbul's long history, its Roman origins, Greek Byzantine youth, and Ottoman Turk adulthood, have left it full of contrasts and contradictions.

It is a city where businessmen dressed in neat suits and ties are whisked to work in shiny Mercedes from swank villas along the Bosporus, where Anatolian peasants lead dancing bears on chains, where tourists mill gaily between Sultan Ahmed Camii's famed "Blue Mosque" and Haghia Sophia, that grand old cathedral of Byzantium, one of Christanity's great monuments.

It is also a city of unrepressed street life, at least by day. Merchants sell their wares in crowded back alleys from handcarts while vendors on the streets offer up mounds of fresh hazelnuts or charcoal-grilled ears of corn.

Along the smooth, stone quaysides of the Golden Horn, boats bob at anchor, while their owners grill the freshest of fish on fiery stoves and serve them up on a rough-cut bun to crowds who wait for them on shore in small, makeshift restaurants.

Walking the ancient streets of Stamboul, passing old covered bazaars, stores brimming with leather goods and foods, it is easy for the casual visitor to miss the malaise that so inflicts the Stamboulis when they pause form their hectic daily pace.

Only the small, street-side shooting galleries that have proliferated -- where young children, no older than 8 or 9, pay a few Turkish lire for a chance to learn to shoot darts with air rifles -- suddenly make one pause and think about the generation of marksmen that is growing up amid the colorful chaos of the city.

"Yes, for you foreigners it is still a good city. It still looks okay to you," said a hotel clerk to his visitor as he checked out. "For the foreigner Istanbul is good weather, the Bosporus and shish kebab. But you don't have to see the daily struggle for existence that is our life. You don't have to live with the violence that comes in the night. You don't see that Istanbul, like the rest of Turkey, is a very sick place."