The mind-set of the residents of this small town in the birch-dotted foothills of the Urals Mountains is summed up by a big black headline in the multicolored brochure that city fathers hand out to visitors: "Karabash -- Black Spot on the Planet."

Their log dwellings and small apartment buildings are literally surrounded by black heaps of industrial waste 45 feet high. Vegetation is sparse, the air smells acrid, and in the winter the snow is flecked with black grit.

More than the landscape is devastated. Two-thirds of the children suffer from lead, arsenic or cadmium poisoning, according to health experts here, near Russia's southern border with Kazakhstan. Studies also show high rates of congenital defects, central nervous system disorders, cancer and other major diseases.

Regional officials blame all this on a 90-year-old copper-smelting plant, whose five tall chimneys loom over a polluted pond that schoolchildren trek over when it is frozen. The plant's emissions are so hazardous that the government shut it down in 1987.

But in April of last year, the Karabash Copper Smelting Works reopened. The town's residents were desperate for jobs, and the government was desperate for tax dollars from industries that needed Karabash's copper. "We didn't have any alternative," said Alexander Gavrilov, chief of the region's sanitary epidemiological service.

Such is Russia's unpalatable choice. A cleaner environment was one of the main promises of the post-Soviet era. Soviet President Mikhail Gorbachev pledged an ecological about-face, repair of the environmental destruction of Soviet times, and enforcement of strict environmental laws by a new environmental protection ministry. "We must make up for our negligence," proclaimed Foreign Minister Eduard Shevardnadze in 1989.

But 10 years later, federal environmental programs are as bereft of funds as Russia's Aral Sea is of water. Factories are dirtier than ever, and workers are more afraid of losing their jobs than losing their health. The only difference in some towns like Karabash is that residents now know the factories are sickening their children. "If you are dying of hunger, what do you care if you will die of cancer in 10 years?" said Vladimir Tsirkunov, an environmental specialist with the World Bank. "Environment is an abandoned child."

Russia is home to the unparalleled Siberian forest, the world's purest body of water, Lake Baikal, and other ecological wonders. But the bulk of its factories are obsolete, the sewage and water treatment systems are breaking down, the oil pipelines leak, and the fast-multiplying number of cars on the road -- one of the benefits of the new market economy -- is creating a new and potent source of pollution. About a third of drivers still use leaded gasoline.

The air is somewhat cleaner simply because so many factories have closed. But about 44 percent of the population -- 65 million people -- live in cities that exceed the Russian government's strict limits on air pollution, according to its latest report on the environment. Most major rivers and their tributaries are heavily polluted. The government says it cannot guarantee the quality of the drinking water. Even the kitchen gardens on which many Russians depend for food may be unsafe. More than 13 percent of the soil tested is contaminated with heavy metals, oil, pesticides or other harmful substances.

How pollution affects Russians' health is hard to gauge. Russians are the exception to worldwide health trends: In most countries, people are living longer and better, but Russians are sicker and dying sooner -- the average male before age 60. But researchers blame the decline in health on the breakdown in medical care and rise in poverty that came with capitalism, not on pollution. Boris Revich, chief researcher with the Center of Demography and Human Ecology in Moscow, estimates that 14,000 Russians a year die from air pollution -- not a high figure. Twice as many die in car accidents.

Nonetheless, pollution is clearly adding to Russia's public health burden. Residents of heavily polluted areas suffer from higher rates of diseases of the blood, lungs and glands, as well higher rates of nervous system disorders and congenital defects, the government's report says. In Chepaevsk, a town of 82,000 clustered around a chemical plant, a study showed men are twice as likely to get cancer and more than twice as likely to die of respiratory disease as in the rest of the province.

The Environmental Protection Ministry was set up to tackle such problems, but Yeltsin reduced it in 1996 to an almost voiceless committee, and funding has been drastically cut. The government devoted only a fraction of 1 percent of its 1998 budget to the environment, and spent even less -- by some estimates, no more than $250 million. The U.S. Environmental Protection Agency, by contrast, spent more than $7 billion.

Many Russian cities, left to finance their own cleanup projects, find the cheapest fixes too expensive. Lori Freer, director of environmental programs for the Moscow office of the U.S. Agency for International Development (USAID), estimates low-cost antipollution devices -- covers for factory furnaces and cement plant filters -- could save 1,700 lives a year in Volgograd, an industrial city of 1 million. But the $100,000 price tag is out of the city's reach.

Several of the most polluted cities are in Russia's heavily industrialized Urals region, known for the mountains that divide Russia's European sector from the vast eastern territory. In Karabash, a town of 15,000 about two hours south of Yekaterinburg, residents have all but given up hope of government help.

From a distance, in the winter, their town resembles a Swiss hamlet. But once the snow melts, there is no disguise for the towering black heaps of slag that line the main road, encircle the factory and spill over into back yards.

Slag, laced with lead, arsenic and cadmium, is the waste from the copper smelting furnaces after raw copper is extracted from ore. Slowly, over the decades, the town has been overwhelmed by it, as the Karabash Copper Smelting Works turned out copper for ammunition in the 1940s and later for foil, electrodes and terminals. The plant's chimneys also pour out particulates that rain down into the soil.

A 1995 government study found children in Karabash suffer from at least twice the rates of congenital defects, disorders of the central nervous system and diseases of the blood, glands and the immune and metabolic systems as kids in a nearby town. Health officials also suspect a high rate of mental retardation among children, although the rate has not been determined. The death rate is more than twice the birth rate, miscarriages are common and only a third of deliveries last year were normal.

Gavrilov, who runs the region's epidemiological service, said physicians won't stay long in Karabash. Nadezhda Ryabitseva, curly-haired and exuding warmth and competence, has stuck it out for a year as chief pediatrician.

The case of Yana Fomina, in particular, brings tears to her blue eyes. A beguiling 8-year-old with a magenta ribbon twisted through her dark braid, Yana wobbles through her grandparents' apartment on twisted legs, and cuddles her plastic doll in warped arms. Her language is limited to words like "come" and "mama." Ryabitseva, gently disengaging her hand from Yana's clinging fingers, said Yana suffers from both a central nervous system disorder and mental retardation.

Yana's mother, a plant worker who doted on the little girl, died of cancer last year at the age of 26. Her grandfather suffered a stroke at 51 after three decades as a crane operator at the plant. Now he drags his right leg as he watches Yana, and struggles to write his name for a visitor with his left hand. "This is how we get by, day to day," he said. "We limp around together."

Is the plant to blame? "For sure," he answered. "I think everything here is connected with the plant. I think it should be closed forever and ever."

Ryabitseva's files are full of such cases. The physician also sees alcoholic, unemployed parents who neglect their children, and knows how badly Karabash needed the 1,000 jobs that the reopened factory provided. Not a single new enterprise opened up in Karabash in the past decade, according to the mayor.

But "the price is too high," Ryabitseva said.

Regional officials hoped for a better outcome in Karabash when they shut the factory down in 1987, throwing as many as 3,500 people out of work. The idea was to stimulate the owners to modernize it, while the government relocated families who live closest to the chimneys and handed out food supplements to help counteract the effects of heavy metal poisoning in children. More ambitious plans called for replacing the contaminated top layer of soil.

"But you know what happened in our country," Gavrilov said. The program, denoting Karabash as an environmental disaster zone, never amounted to much more than a document. Regional officials finally decided the only potential source of funds was the plant itself, and allowed it reopen, with somewhat more efficient filters.

"Maybe you can help get some humanitarian aid for the people," Gavrilov said. "The problem is almost unembraceable."

Not every city in the Urals is so hopeless. In Nizhniy Tagil, a city of 390,000 about four hours due north, city officials are slowly, painfully forcing metallurgical factories to modernize, relocating families from neighborhoods that border the plants and refurbishing the water treatment plant.

Town officials don't underestimate their task. Even if they can clean up the air and water, they face a huge public health problem. A 1992 study found the rate of disease was four times higher than in nearby cities. The rate of tumors in children was 12 times higher. Only about a fifth of the city's children are considered healthy. Perhaps most worrisome, the level of congenital defects is rising.

The federal government can claim little credit for Nizhniy Tagil's progress: It came up with only 2 percent of the clean-up funds it promised four years ago. USAID, in a pilot project, gave the town three times as much, or about $9 million.

To USAID official Freer, Nizhniy Tagil is one of the bright spots. But there are three dozen more such cities in Russia, just as badly polluted and just as much in need of funds.

Researcher Nathan Abse in Washington contributed to this report.

CAPTION: Yana Fomina, 8, has mental retardation and a nervous system disorder thought to be caused by pollution.

CAPTION: Two girls walk home from the school across the road from the copper smelting plant in Karabash.