In one of his most popular songs, Swedish hip-hop artist Timbuktu sings of two strangers warily eyeing each other on a Stockholm subway, one a white Swede, the other an immigrant, each with his own thoughts and prejudices.

"I wonder why he's eyeing me like this," the white Swede asks himself. "Maybe he's planning to follow me and rob me at knife tip. I bet he's a drug user that beats his kids, forces his wife to wear a veil."

Timbuktu knows something about racial prejudice -- as a black man born in Lund, Sweden, whose first language is Swedish, but who for most of his life has had to deal with the stares, the taunts, the curiosity and the inevitable question: "But where are you really from?"

From first grade through sixth, he recalled, he fought frequently during recess with a group of three boys who taunted him with racial insults. Even though he's a celebrity in Malmo, which he calls home, he says he is still followed by security guards when he enters a department store. And while his DJ sessions can pack the house, he finds he is denied entry to some clubs.

"I'm Swedish, definitely, and more and more so now," said Timbuktu, whose real name is Jason Diakite. He is the son of a black American man from Harlem and a white American woman from Scranton, Pa. "But Sweden still has a very clear picture of what a Swede is. That no longer exists -- the blond, blue-eyed physical traits. That's changing. But it still exists in the minds of some people."

Across Europe, societies that were once solidly white and Christian are being recast in a multicultural light. The arrival of large numbers of people from the Middle East, East Asia and Africa -- many European countries now have minority populations of around 10 percent -- is pushing aside old concepts of what it means to be French or German or Swedish.

In Sweden, nowhere is the change happening faster than in Malmo, the country's third-largest city behind Stockholm and Goteborg. It is a gritty shipyard town of about 265,000 people. Once a major industrial center that drew people from abroad with the prospect of jobs, Malmo has lately fallen on hard times as factories have closed.

About 40 percent of Malmo's population is foreign-born or has at least one foreign-born parent. The bulk of foreign-born people come from the former Yugoslavia, Iran, Iraq and the Horn of Africa. Among school-age children, 50 percent have at least one foreign-born parent, and analysts project that the number will soon reach 60 percent.

The city's official Web site boasts that its inhabitants come from 164 countries and speak 100 languages.

A walk through the Mollevangstorget area of Malmo, where Timbuktu lives, shows how much immigration has changed this city. The Middle East restaurant sits across the street from a falafel shop, down the road from an Indian shop and the Tehran Supermarket, which is filled with nuts, dates, dried fruits and banana-flavored tobacco imported fresh from Iran.

"Immigrants like being here, because they can find things from their own country," said a man working behind the supermarket counter, who gave his name only as Rahim. "Four thousand Iranians live here. But there are Swedes shopping here as well."

The ethnic diversity is part of what drew Timbuktu, 29, here to make his music. "Malmo is a quite interesting town for the way Sweden may look in the future," he said in an interview over coffee at the city's Hilton Hotel, as two female fans ogled him from a table nearby.

Almost 12 percent of the roughly 9 million people living in Sweden as of this summer were foreign-born, government statistics show. Sweden has long hosted white immigrants from Finland and the Baltic countries. But according to the latest figures, about 7 percent of the population comes from outside Europe, most of them nonwhite.

Elsewhere in Europe, immigration has caused significant social turmoil, giving rise to political parties with anti-immigrant platforms, such as the National Front in France, the Freedom Party in Austria and the Pim Fortyn party in the Netherlands. But in Sweden, the process has flowed more smoothly. Though immigrants here frequently experience prejudice and rejection, it appears to be less institutionalized than in other European countries; an anti-immigrant party in Sweden got just 1.4 percent of the vote in elections two years ago.

That result occurred partly because the Swedish majority populace has gone about the business of absorbing the newcomers with the famous Scandinavian seriousness of purpose. There are programs to help new arrivals learn Swedish. There are programs to help them find housing. And there are generous subsidies for those who aren't working.

In France, black and brown faces are largely nonexistent in politics, government, the news media and the top echelons of business -- anywhere outside of sports and music. But in Sweden, immigrants have assumed a much higher profile.

Foreign-born Swedes hold a significant number of parliamentary seats. The top Swedish chef, Marcus Samuelsson, is an ethnic Ethiopian. Some of the most popular comedians on television are foreign-born, including Ozz Nujen and Shan Atci, both Kurds. One of Sweden's top filmmakers, Josef Fares, came to Sweden from Lebanon. And Sweden's silver medal-winning Olympic wrestler, Ara Abrahamian, was born in Armenia.

"We have a news anchor who is mixed, black and white," noted Timbuktu.

But Sweden's quiet transformation has not been without problems. In Malmo, the biggest problem is unemployment. In Rosengard, the most heavily immigrant district of Malmo, the unemployment rate is around 65 percent, said Jahangir Hosseinkhah, division head of the district's employment and training office, and an ethnic Azerbaijani who emigrated from Iran.

Hosseinkhah said Sweden's generous welfare system is partially to blame. "We have a welfare system in Sweden that is usually a help to people, but it is also a problem," he said. For some immigrants, he said, "they don't need to get a job, because they get an allocation from the state." He said his office has handled immigrants who had lived in Sweden as long as a decade and had never worked.

The influx has also forced the Malmo school system to adapt. At the Borgarskolan high school, 30 percent of the 1,400 students are from immigrant families; other public schools have an even higher percentage. One problem is that the school does not have enough interpreters available for parent-teacher meetings.

Some students interviewed at Borgarskolan said they felt no discrimination at the school, because the classes are so heavily mixed. But in the wider community, they said, they sometimes feel caught between two worlds.

"They don't assume me to be Swedish," said Kamelia Tadjerbashi, 17, who has lived in Sweden since she was 6 months old, the child of an Iranian mother and a Turkish father. "Swedish people get impressed that I speak Swedish so well."

Another 17-year-old student from Iran, Honey Ghaffari, agreed. "They look at you and see dark hair and assume you can't be Swedish," she said. Ghaffari has also lived in Sweden almost her entire life.

"Sometimes, in small stores, if there's an old lady, she'll look at me like I'm shoplifting something," said Charles Anderson, 18, who came here from Cameroon to play soccer for a Swedish team. "I think people have a problem with other cultures. It's a problem of time. People haven't been to Africa. They travel to Thailand, and maybe Spain."

But the biggest problem in Malmo, and in other parts of Sweden, is what people here call "ghettoization": White Swedes typically live in certain areas, in this case the city center, while immigrants are increasingly clustered on the outskirts in their own communities. As Hosseinkhah put it: "People physically live in this area, but they mentally live in their former countries."

"They don't feel they are a part of this community," he said. "They don't know this society. They don't know the codes. . . . There's that feeling of 'we' and 'them.' " He said he has met refugees who have traveled thousands of miles to get to Malmo, but once settled, have never visited the city center.

Ghettoization is a problem that also unsettles Timbuktu.

"Will it be like the United States," he asked rhetorically, "where all the Somalis live in one part of town, and all the Koreans in another?" He added, "I get the feeling that tension is going to increase in Sweden over the next 25 years."

Timbuktu, 29, a hip-hop artist born in Sweden, performs songs about racial prejudice and stereotypes.