Canongate, £16.99, 323pp. £15.29 from the Independent Bookshop: 08430 600 030

The Accident, By Ismail Kadare, trans. John Hodgson

Ismail Kadare is a novelist of the grand manner who sees himself in a line from Shakespeare and Dante, and a modernist fabulist who by allegory and metaphor has nimbly laid bare the ironies and idiocies of recent Balkan experience. His belief that the best jokes are the old ones – cruelty, jealousy, selfishness, intolerance – place him in a long line of European satirists. Because of where he comes from, satire may flip into tragedy. "Everywhere in the world events flow noisily, while their deep currents pull silently," he writes in his new novel, "but nowhere is this contrast so striking as in the Balkans."

The Accident takes a familiar Kadare motif, the impossibility of relationships, and hitches it to an allegory of the one recent Balkan conflict in which the rest of Europe involved itself, the war in Kosovo. At the novel's opening its two Albanian protagonists, an analyst at the Council of Europe, Besfort Y., and Rovena, an intern at the Vienna Archaeological Institute, are in a taxi on their way to Vienna airport.

Without warning the cab swerves off the autobahn, hurling both passengers out. The investigation of their deaths passes through many hands, including the Serbian and Albanian security services. The injured driver can offer no reason, except that his taxi flipped out at the exact moment when he looked in the rear-view mirror and saw the couple "trying to kiss".

This phrase, and the effortful fatal embrace it describes, dominate the investigation, eventually taken over by an "unknown researcher" whom we may suspect to have something in common with the novelist. The researcher is more diligent than the security services. The picture of the lovers' 12-year affair, conducted across Europe to the mantra of hotel names – Loreley, Schlosshotel-Lerbach, Excelsior Ernst – is tangled, stressed by time and geography, and banal, accessorised by the thin glamour of five-star bedrooms, lingerie and late-night conversations. Kadare's stern loquacity, well captured in John Hodgson's translation, does the erotic and emotional components of the story full justice, and neatly nails both the lovers' inability to commit and modernity's particular gift to human relationships. Well-heeled homelessness is still homelessness: "It seemed that nobody believed in love any more."

The affair reverberates with echoes of political conflict. Kadare invites the reader to play a game about how far to take his allegory of the lovers and Serbia-Kosovo. What should we read into the revelation that a few years into their relationship the couple were "trying to cover up their love for each other by pretending to be whore and client"?

There is a true, and intentional, confusion at the heart of this novel, it seems; as there is unknowability at the heart of all relationships and political alliances. Kadare's compelling gift is that, hallucinatory, baffling, even irritating at first, The Accident cannot be put aside, but richly teases the reader to try to understand more of the meaning of what, exactly, the cab driver glimpsed in his rear-view mirror.

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