Waving Syrian flags, thousands of people poured into the capital's Seven Lakes Square on Monday in an orchestrated show of anger over a U.N. inquiry that implicated the country's leadership in the assassination of former Lebanese prime minister Rafiq Hariri.

There was indignation: "Stay away from Syria," one banner declared. There was a hint of festivity, too -- the cheer that comes with schools, universities and government offices taking the day off to bolster the crowds.

"I came to denounce the investigation," explained 17-year-old Hisham Hassan, holding a portrait of President Bashar Assad.

He paused, furrowing his brow. "Why else?" he asked, turning to his friend, Hisham Shaqairi.

"National unity," his friend said.

"Right, national unity," Hassan answered, nodding.

But amid the chants and smiles, one poster hinted at the deep unease that courses through Damascus these days, as its government faces its greatest crisis since the 1973 Arab-Israeli war. "Syria will never be Iraq," it read.

Shaqairi saw the poster and understood the message. "Iraq yesterday is Syria today," he said, turning serious.

In markets suffused with the scent of spices, in homes struggling to make ends meet and in cafes crowded at the end of the daily dawn-to-dusk fast of the Muslim holy month of Ramadan, the plight of Syria's neighbor casts a long, menacing shadow. It is bolstering the legitimacy of Assad's isolated government, dictating the strategy of its still-feeble opposition and molding opinion toward the United States' hinted aim, the end of 35 years of rule by Assad's Baath Party, many people here say.

"The scenario of Iraq is in the back of the minds of the majority of Syrians," said Yassin Hajj Saleh, a 44-year-old opposition activist. "The regime has greatly benefited from the disastrous situation there. It points its finger: 'Look at Iraq, look at Iraq. Occupation, terrorism, death, daily killings and civil war.' That scenario is terrifying to Syrians."

The mounting crisis, with the U.N. Security Council due on Tuesday to discuss the U.N. investigation into Hariri's killing, has fed anxiety more than anticipation, fear more than hope, creating some of the same sentiments voiced in Iraq in March 2003.

"You are in a car, the driver is crazy, the road is downhill and we have no brakes," Saleh said.

Rumors of the government's demise -- incubated by gossip that swirls through the capital over the reported suicide this month of the powerful interior minister and divisions within Assad's family -- are probably premature. Since 1970, the state has weathered a revolt by Islamic activists, conflicts with Israel, crises with the United States and the collapse of its historic ally, the Soviet Union.

The U.N. report implicates a cross section of the government -- officials from the Sunni Muslim majority and Assad's own Alawi minority, the president's family, politicians and intelligence leaders. The most immediate result, analysts say: an inclination in the government to close ranks as its survival becomes synonymous with the survival of its officials.

Over the past few years, the government's prestige has tarnished -- the hasty withdrawal from Lebanon this spring after a 29-year military presence was, by all accounts, humiliating, and some Syrians are startled by a foreign policy that lacks the acumen of Assad's father, Hafez, who died in 2000. The United States has severed contacts with Syria; Europe has scaled them back.

The United States wants more aggressive efforts to close the border with Iraq to foreign fighters and to end the accommodation of militant Palestinian factions and the Lebanese Shiite Muslim movement Hezbollah.

The Syrian ambassador to the United States has responded that his country has increased its border force from a few hundred troops to 10,000, built sand barriers, installed barbed wire along the 360-mile border and captured more than 1,500 people trying to cross the frontier. In an Oct. 5 letter to U.S. lawmakers, he invited a congressional delegation to Damascus for talks and offered to resume intelligence and security cooperation. Syrian officials complain that the offer, and others like it, have gone unanswered.

To many people here, the lack of dialogue with the United States distinguishes this crisis. Hardly anyone can suggest with confidence a way out.

"The Syrians think if they cooperate" with the United States, "they are contributing to undermining the regime. They think if they don't cooperate, they are also contributing to undermining the regime," said Marwan Kabalan, a professor at Damascus University and analyst at the school's Center for Strategic Studies. "It's damned if you do, it's damned if you don't."

Though Syria is one of the region's most authoritarian states, its repression pales compared with the relentless brutality in Iraq during the rule of Saddam Hussein. While the Baath Party in Iraq relied heavily on violence and a degree of co-optation to hold power, it is the inverse in Syria. The government is based on more than its intelligence apparatus and Assad's family. For decades it has cultivated support in the public sector, army, security services and vast bureaucracy, an alliance that spans Syria's tapestry of sect and ethnicity.

Assad himself has eschewed the heroic iconography of his father, who ruled like a sphinx perched in a hilltop palace. He has met many of the Damascus elite, takes his family to restaurants, drives his own car and displays what many see as an impulse to be liked, not feared. He remains popular among Syrians, many of whom distinguish between him and an unpopular government.

But under Assad's five-year reign, the leadership circle has narrowed dramatically; many analysts say key decisions are made by his family -- his brother, sister and brother-in-law. Over them presides Assad, who may lack a strong hand but, by most accounts, remains in control. That perception has led some to discount divisions within the highest echelons of the leadership.

"You cannot split one person," said Ayman Abdel Nour, a Baath Party reformer and editor of a popular e-mail bulletin.

Through the 1940s and 1950s, Syria, like Egypt and Iraq, enjoyed a vibrant political life, with a measure of democracy. In all three countries, a lasting legacy from decades of authoritarianism has been society's depoliticization. The various wings of the Syrian opposition -- the Muslim Brotherhood, groups representing the Kurdish minority and a generation of leftists and nationalists in and out of jail -- have in common their weakness. Iraq, perceived as a chaotic, violent place, is often projected as the future because few can see an alternative to the current order.

The fears are particularly pronounced among minority Alawites, whose community has long buttressed the government. In conversations, some Alawites joke that they are prepared to return to their villages in the event of strife. Others talk of applying for visas.

"Balbal " -- a chaotic mess -- was what one protester Monday predicted if there were instability.

"God forbid, if something happened, there's no doubt the result would be chaos," said Muhannad Saeed, standing with friends at Seven Lakes Square. "There are people who don't have principles, people who don't have culture, the unemployed. There's no doubt they would create terrorism. There's nothing ahead for them. It's only God."

Many intellectuals in Damascus contend that the government encourages that perception. The nightly news bulletin often leads with carnage in Iraq. So do the front pages of the state-run newspapers. In times of crisis, the government has announced the arrest of Islamic militants. Most recent was this weekend, "as if God sent them the information," Abdel Nour said.

"The government sells this to every foreign politician who visits," he said. " 'If we fall, there will be radicals, fundamentalists and Islamists in Syria. This will be bad for you in Iraq and bad for your ally Israel.' "

The fears of an Iraq scenario were in part behind the Damascus Declaration, a statement issued Oct. 16 by a variety of opposition groups and figures. For perhaps the first time in Syrian history, it brought together the exiled leadership of the Muslim Brotherhood, a jailed lawmaker, leftist and nationalist groups, Kurdish movements and secular dissidents in what opposition figures hailed as a watershed for a camp that the government has long kept splintered and acrimonious.

The four-page document called for an end to emergency law, in place since 1963; the release of political prisoners; and the return of exiles. It endorsed the cultural and political rights of Kurds and other minorities and, in a key concession to the Brotherhood, declared that "Islam is the religion of the majority." It called for Syria's transformation, through peaceful means, from "a security state to a political state," based on free and regular elections, a democratic constitution, rule of law, pluralism and individual rights.

"Our intention is to say to the world, 'It is not true that the options in Syria are either the regime or chaos,' " said Saleh, the opposition activist, who spent 16 years in jail and was among those who spent five months drafting the declaration.

In a best-case scenario, he said, a transition in Syria would cost dozens, perhaps hundreds of lives and would transpire in a matter of weeks. "It may be a price that Syria can bear," he said.

Others are less sure. "If the people believe the situation in Syria will be like Iraq, they will choose Bashar Assad," said Haithem Maleh, a 74-year-old human rights lawyer and outspoken activist.

Around him were the artifacts of his six years in prison in the 1980s -- three framed Koranic inscriptions, one crafted in a cell over three months by arranging 96,000 ballpoint-size beads. "I don't know if we will succeed or not, but I hope," he added.

Abu Abdo Mustafa sat in a shop splashed with color, cluttered with inlaid wood and miniature Persian paintings, and shadowed by the landmark Umayyad Mosque and the cavernous Hamdiya Market. He said he worries about where the crisis is headed and longs for the U.S. policy of past years.

"They always used to use vinegar and honey," he said. "You can't only use vinegar."

As a merchant, though, he had the Damascene sense of a deal: Bargain only so far, Mustafa suggested. "We've seen Lebanon. We're watching Iraq very carefully," he said, his phrasing judiciously vague. "No one has an alternative. If you have someone coming who's not popular, you'll have the same as Iraq. People here are wiser."

Protesters in Damascus burn an Israeli flag during a mass demonstration against a U.N. inquiry that has implicated Syria's leadership in the assassination of former Lebanese prime minister Rafiq Hariri.Schools and government offices were closed to bolster protest in Damascus.