The view is spectacular from Pizzo Sella, a rugged peak to Palermo's north--if you close your right eye. The blue bay of Mondello, its beach lined with gracious palms and Mediterranean pines, lies below, while the delicate contours of Mount Pellegrino can be seen across the valley. With full vision, however, the urban reality of the Sicilian capital swings into view, crowded and creeping from the city center up the surrounding foothills.

In the 1970s, the Mafia set about acquiring and parceling out this prime real estate to favored developers. With little concern for the environment or the region's natural beauty, hundreds of concrete villas and homes were built on Pizzo Sella, on land zoned for pasturing.

The overbuilding created one of the "eco-monsters" that mar Italy's landscape. They are concrete vestiges of wild and hugely profitable real estate speculation that proceeded for decades, sometimes with the involvement of the Mafia, always with the help or blind eye of local authorities. Flagrant violations of building and zoning codes were routinely legalized after the fact through what Italians call amnesties.

Now national authorities and many local governments are pledging "no more amnesties"--and they have begun to demolish the most visible violations of the country's zoning laws to send a message that ignoring them no longer pays. Here in Palermo, bulldozers are knocking down the first of more than 200 villas in varying stages of completion that cover Pizzo Sella, what is known locally as "The Hill of Shame."

With great fanfare this month, Palermo Mayor Leoluca Orlando and Gianni Mattioli, the undersecretary of public works, presided over the demolition of a group of six unfinished houses, huge cinder block skeletons with the rudiments of wide terraces overlooking the steep slope. "By demolishing these illegal buildings, we are eliminating one of the symbols of the terrible system that for too long has linked Mafia interests with building speculation," Orlando said.

A parcel of 250 acres of land on the hillside was bought in the 1970s by Rosa Greco, the sister of mob boss Michele "The Pope" Greco, who is now serving a life prison sentence for Mafia-related crimes. She sold the land to developers, and local officials granted more than 300 building permits in 1977, just days before a new law drastically restricting building went into effect.

Over the years, 209 homes were constructed or begun, ranging from multilevel villas with pools to two-story houses, all with the same magnificent view.

Construction slowed when local magistrates began investigating the land deals in the late 1980s. A subsequent trial resulted in the conviction of about a dozen developers and local officials, including a former mayor of the city. A second trial in which 17 defendants, including Greco's husband, are accused of illegal real estate speculation is expected to conclude in January.

The demolitions may be more symbolic than practical. The destruction is progressing in stages, and by the end of this first phase, only 14 skeletal structures will have been torn down even though the city of Palermo would like to wipe the entire slope clean, said Franco Miceli, head of the public works department, which deals with illegal construction. "It's much easier to build a house than destroy it," he said, not only because of the 40 degree angle from which the bulldozers must do their work.

"There are 114 people who have asked for an 'amnesty,' and we must first see what will be done about those," he said. "There is a trial underway. And then there are those people who put all their life savings into their home. They have to be taken into consideration."

Salvo Zarcone, 50, a professor of Italian literature at the University of Palermo, said he was one of the first to buy land and begin building a house on Pizzo Sella in 1983. "I sold two apartments in the city and borrowed money from my in-laws to build this house," he said. "I had all the permits necessary. I built it myself and with my own workers. Now they tell me I can't even move a rock in my garden. Helicopters fly over us, police come by and check us constantly, taking pictures and invading our privacy. I'm still paying the mortgage and it's not even my house anymore. They have sequestered it."

Zarcone said building on the slope continued unchecked through the 1980s. "It was right there where everybody could see," he said. "Where were the city administrators then? They're the same people who now think tearing down houses is a good idea."

Mayor Orlando insists that it wasn't his administration that let Pizzo Sella become "The Hill of Shame" and that demolition will be decided case by case when the trial is over. "It's true there are families there who bought their houses in good faith, but there is also a Mafia boss under house arrest" in the neighborhood, he said.

Critics say the demolitions are all show and that speculative building will be allowed to go on like it always has. But Ermete Realacci, president of Legambiente, Italy's largest environmental association, said the political climate for combating overdevelopment is more favorable than it has been in the past.

The demolitions tell "everyone that they can't make money anymore from illegal construction," he said. "The government has said there will be no more amnesties."

Even so, a survey by Legambiente shows that last year alone, 25,000 illegal structures were built in Italy.

The most spectacular of the "eco-monsters"--the controversial seven-story Fuenti Hotel overlooking the famed Amalfi coast in Vietri-sul-Mare, south of Rome--was taken down last June. After more than 30 years of legal wrangling with environmentalists, the hotel owners were forced to surrender and leave the rocky slope the way they found it.

Bulldozers have been at work in other parts of Italy, mostly in the south. This fall, the first of some 600 illegal houses built in the protected dunes of the Simeto Oasis near Catania, in eastern Sicily, have come down, while last year dozens of beach homes were torn down in the coastal land at Eboli, between Salerno and the ancient city of Paestum.

In Rome last month, homeowners assaulted city workers who had begun to destroy seven large houses built on agricultural land outside the prestigious residential community of La Storta on the city's northern borders. Two helicopters and more than a hundred police officers were called in to protect them as they worked their bulldozers.

Massimo Miglio, who heads Rome's office on illegal construction, said he has been threatened and now travels under police escort. "The people who bought these houses knew it was illegal. They were ordered by the court to stop five or six times, and they still kept building," he said. Some property owners in La Storta may be given land to build a house in another location.

CAPTION: As legal problems mounted from corrupt land deals, this unfinished house on the Pizzo Sella hillside in Palermo was finally abandoned.