That night, a commando of 40 armed men sealed off streets in the Algiers suburb of Bentalha, and proceeded to massacre up to 200 innocent civilians. Algers la Blanche had become Algers la Rouge. After five and a half years, the war - which began when the government cancelled 1992 elections that the Islamic fundamentalist opposition seemed bound to win - has moved as close to the centre of power in Algeria as Southall is to Downing Street: more terrifying, more mysterious and more intractable than ever before.
In towns and villages in the hinterland and in Algiers itself, panic- stricken residents have formed militias and vigilante groups to protect themselves. But in the past four weeks alone, 600 people have died in separate attacks. Almost certainly, these have been the work of the GIA, most extreme of the armed groups which have sprung from the Front Islamique de Salvation since the FIS was cheated of power and then banned. No less surely, they have taken place with the knowledge of, and perhaps help from, parts of the regime itself. At least two recent massacres near Algiers took place close to police and army barracks. Yet the security forces did not lift a finger.
Such is the horrific condition of a country of 28 million at Europe's southern gates, lacerated by a conflict that has taken at least 60,000 lives, conducted by a secular Arab government and insurgent fundamentalists, at war not only with each other but among themselves. In each case the internal split is the same, between hardliners and those ready to negotiate. In neither camp has one faction decisively gained the upper hand.
In the government the argument pits dialoguistes , led by President Liamine Zeroual, against so-called eradicateurs, headed by the army chief of staff, Mohammed Lamari, who believe the rebels must be crushed, whatever it takes. Policy changes abruptly as one faction gains or loses the advantage. In July it seemed game and set for the moderates, as the former deputy leader of the FIS, Abassi Madani, was freed from house arrest. But just six weeks later he was back in confinement - a clear success of the hardliners. Now he may be freed again. Twice too, the government has claimed to have killed Antouar Zouabri, top commander of the GIA. Each time the extremists have responded with a chilling act of butchery.
Among the insurgents, the confusion is at least equal. The AIS, the "moderate" armed wing of the underground FIS, announced immediately after the Bentalha slaughter that it was calling a ceasefire from 1 October, insisting this would expose the "criminal" GIA as the hand behind the massacres. Within hours other fundamentalists accused the government, not the GIA, of doing the killing.
Both may be right. The parallel which springs to mind is Israel: just as those arch enemies Prime Minister Benjamin Netanyahu and the Palestinian suicide bombers of Hamas feed off each other in thwarting their respective moderate rivals, so in Algeria extremists and eradicateurs serve each other's purpose. By the barbaric logic of this war, it is only too likely that hardliners have deliberately allowed massacres to take place, to show that negotiation is pointless. If hundreds die, so be it. For throughout the country's recent history, shadowy power struggles and feral violence have been constants.
Algeria operates according to its own rules. Egypt, for instance, has comparable problems with Islamic fundamentalism, but its tradition is peaceful and agricultural, and the extremists' targets are few and carefully chosen. Algeria's fault lines are tribal and regional, magnified by local feuds and lingering hatreds between resisters and "collaborators" dating back to the colonial era.
The 132 years of French rule saw periodic uprisings, while the war of independence in reality began not in 1954, but on 8 May 1945, when - as Europe celebrated victory over Germany - 100 French settlers in Algeria were hacked to death by nationalist rebels. During the "official" war from 1954 to 1962, up to a million people may have been killed, with slaughter and intimidatory savagery. When it was won, guerrilla leaders took the habits of insurgency - secrecy, tight clan loyalties and ingrained suspicion of outsiders - into government.
There was also a pride and prickliness borrowed from the French, an inflexibility in negotiating and a taste for relentless logic. In the 1970s and 1980s, these were assets that allowed the country to punch above its weight, in Opec and elsewhere. Today they are self-defeating, virtually ruling out the possibility of an honest broker from outside attempting to solve the crisis.
What can a horrified world do? The IMF and the European Union might halt aid programmes - but with what impact on a country which is one of the world's great energy exporters? Whatever Algeria's deficiencies, foreign currency is not one of them, as long as the well-protected oil and gas fields in the desert continue to pump forth their bounty. Direct foreign intervention, adamantly rejected by the regime, is equally unlikely. France and the US, both supporters of President Zeroual, are discussing possible initiatives. But whatever they devise will probably be given as short shrift as offers of mediation by the UN Secretary General, Kofi Annan, and an Italian lay Catholic order, dismissed by Algeria's state- controlled media last week as "a plot by enemies of the nation".
As for the return of French troops as part of a peacekeeping mission, that would be akin to German soldiers imposing order in the Balkans. France has tasted Islamic vengeance in this second Algerian war. Two years ago, bomb attacks, carried out by fundamentalists after Paris had come out in favour of Zeroual, killed and wounded hundreds in France.
The prospects are grim. Local elections on 23 October will settle little. A shift in Algeria's unfathomable internal balances could allow real talks to begin, but despite the AIS ceasefire offer, there is scant sign of a change of heart. More likely the perverse complicities and the carnage will continue. The military regime lacks the power or will to prevail, but if it falls, Algeria's slide into anarchy would be complete.