SANAA, YEMEN -- Down a dusty alley of the old city's ramshackle bazaar, behind huge mounds of sultanas, coffee and spices that have been marketed here for more than three milleniums, a young vendor named Ahmed invited a curious visitor to join him and his neighbors in an afternoon ritual enigmatically described as the key to Yemeni democracy.

The men stretched languidly on mats spread around the floor and began munching green leaves plucked from bundles of small branches. Each of them would slowly build up a wad of moist leaves in his cheek, sucking the juice through the mucous membranes. The bitter, astringent taste was soon forgotten as conversation became more animated, ranging over diverse issues such as bread and fuel prices, the revolutionary changes in the role of women, Iraq's President Saddam Hussein and the risks of war in the Persian Gulf.

Each afternoon, life in Yemen comes to a virtual standstill for three or four hours as this scene unfolds in countless shops and salons around the country. Chewing "khat" (pronounced gut) -- the mildly narcotic leaf that packs a stimulant punch equal to a double espresso -- is more than the national pastime here. It functions as a basic forum of social intercourse where business deals are consummated, marriages are brokered, and political bonds are sealed. In Western terms, the khat chew fulfills all of the purposes served by the power lunch, the kaffee klatsch and the cocktail hour.

In this rugged land of almost incessant tribal warfare, the khat chew helps hold a violent society together. Blood feuds -- perpetuated when assassinations are habitually revenged by killing kinsmen of the murderer -- are rarely settled unless money changes hands and khat is chewed.

In a country where most men proudly flaunt curved daggers in their belts or Kalashnikov assault rifles on their shoulders, the bitter green leaf's universal popularity represents a unique common bond, helping to sustain tenuous truces that have preoccupied President Ali Abdallah Salih during much of his 12 years in power.

When North and South Yemen merged into one nation last May, Salih vowed to promote a democratic society through free speech and free elections. Successful experiments in democracy are rare in the Arab world, but Yemeni officials believe their effort will be aided by the national habit of munching those green leaves.

"The khat chew, in a way, is like a little parliament," explained Abdel Malik Sindi, an Information Ministry official. "You can find government ministers sitting together with laborers, discussing big problems and small, irrespective of social status. Besides, many poorer people usually know where to find the best khat."

In some households more than half the monthly income is spent on khat. Children have been known to go hungry so a father can maintain respect and admiration among his peers by sharing the finest-quality khat at an afternoon chew. As a luxury crop, khat has acquired not only high economic value but great social prestige for its cultivators. Production has more than doubled in the last two decades, displacing grain and the famed Mocha coffee because of its lucrative value.

Khat connoisseurs estimate there are 80 varieties, with different tastes, strengths and sensations. "It can be as complex as wine, and people will go to great lengths to find choice branches from a particular part of the valley," said Eric Watkins, a British journalist and academic researcher based in Sanaa who has traveled widely throughout Yemen sampling different kinds of khat.

Some Yemenis swear that khat has important medicinal value, particularly in controlling diabetes. A popular rumor among returning Yemeni laborers who worked for years in neighboring Saudi Arabia is that the portly King Fahd has taken up khat chewing to control diabetes, curb his appetite and reduce his weight. But doctors in Yemen warn that too much consumption can cause heart palpitations and, ultimately, cancer of the esophagus if wads of khat are swallowed too frequently.

Two weeks ago, Secretary of State James A. Baker III, known for his occasional penchant for chewing tobacco, passed by Ahmed's stand and waved off repeated offerings of khat samples from vendors at the bazaar.

"I know it is legal in Yemen, but it is not legal in the United States," Baker was heard to remark to his Yemeni counterpart, Abdel-Karim Iryani, who was showing him Sanaa's old city.