In the restaurants, the tables are crowded with lawyers and writers eating fine food and drinking freely of the local wine, Cote de Mascara. French cheeses are served, and in the evenings the whisky consumption is impressive.
Creating this semblance of peace in the capital takes 10,000 troops, for beyond the boulevards Algeria is in the grip of something like a civil war. More than 3,500 people have been killed in a brutal trial of strength between the military government and an unseen army of Islamic fundamentalists.
There are road-blocks everywhere and riot police on constant patrol, their faces hidden by balaclavas to prevent identification, their Kalashnikovs pointing into the street. They are known as Ninjas, and are barely in control. By night the silence of the curfew is occasionally broken by the sound of machine-gun fire, or even what sounds like bombs. Locals whisper that 20 people die every day.
Conspicuous by their absence now are the foreigners, who have been warned that they are a guerrilla target. Already 27 have been murdered. Embassies have pared their staffs to the minimum - Denmark transferred its mission wholesale to Tunis.
The Hilton hotel, opened only last autumn, has closed after threats to its expatriate staff. Since a French cameraman was killed two weeks ago, most foreign journalists, including those from Reuter and Le Monde, have also been withdrawn.
The diplomats who remain travel by bullet-proof car from heavily protected embassy to equally protected residence. 'I don't want to be a martyr to the cause,' an ambassador told me. Businessmen who wish to visit from abroad are warned not even to fax information about their arrival times.
The Algerian middle classes, too, are in flight. Many villas in the hills above the city are shuttered, their owners now in France, Tunisia, Morocco or Quebec. 'You probably won't find me here on your next visit,' said one businessman, a veteran of the war against the French. 'I never thought it would come to this. The future looks very black. I'm off to Morocco.'
One diplomat explained: 'They are absolutely terrified; terrified of being killed by the fundamentalists . . . terrified that there will be a civil war.' And with reason. Scores of leading scientists, writers, journalists, doctors, civil servants and secular politicians have been murdered.
'It's the genocide of intellectuals,' said one journalist. Victims are assassinated in front of their families, in their cars, in their homes, in markets, in lifts. They are shot, their throats are cut - l'egorgement spectaculaire, it is called, an especially humiliating way to die, because this is the way animals are slaughtered.
'You never know when you leave home in the morning whether you'll get home alive,' said the receptionist in my hotel. She was not being melodramatic. Forty yards up the street, an optician's shop is closed. Three weeks ago its owner, a Tunisian Jew, was killed on the doorstep with a pistol fitted with a silencer.
How on earth, Algerians wonder, have they come to this? Just over two years ago, the country was on the brink of its first democratic election. Three decades of dour and corrupt mismanagement by the National Liberation Front (FLN), the party that drove out the French, appeared to be at an end. After riots in 1988, they had been forced to promise free elections.
Voting was to have been over two rounds, but in the first ballot in December 1991 the Islamic Salvation Front (FIS), an organisation with an uncompromising message of social change, won twice as many votes as its nearest rival. The army panicked, the second round of voting was blocked and a five-man High State Council was appointed to save the country from 'another Iran'.
The middle classes were relieved. 'Better a military dictatorship than a fundamentalist one,' they said. But what followed has made most of them think again. Lacking any raison d'etre other than to keep itself in power, the government embarked on savage repression of the Islamic movement.
This has been, by common consent, totally counter-productive, pushing the Islamic activists from protest to revolution and driving masses of uncommitted Algerians into their arms.
Tour the narrow streets of Bab el Oued, the historic poor quarter that looms over the west of the city, and again you will be struck by the throng of people in the streets. But these people are not shopping or lunching; they are just passing the time.
Many have been doing this for years: there is no work in Algiers and they cannot go abroad (a notice in the French embassy reads, 'No visas until further notice'). They cannot go home either, for most still live with their families in cramped conditions, as many as 16 to a two-room flat. Some have to sleep by rota.
Hassan, a former waiter, was out on the street among the crowds one evening, waiting for a taxi, when an army patrol picked him up. 'I had done nothing,' he said. He was not an Islamic militant and had never been involved in politics.
For two years he was held in detention camps deep in the Sahara where conditions were so bad that he lost 30 kilos in weight. He was released two weeks ago with 800 others, none of whom was charged or tried. Not surprisingly, he is bitter. He is in hiding, but many of his fellow detainees have joined the fundamentalists. The camps, he says, turned ordinary people into terrorists. 'They were like training camps.'
The government's approach today is shockingly similar to that of the French in the Fifties - brutal, misinformed and persistently helpful to the cause it is fighting. Said, a journalist, says: 'The internment camps are an example of the kind of stupid repression that has totally backfired. It's policies like these that are destroying the country.
'The government is blind, stupid, greedy, out of touch. It doesn't care that it is destroying Algeria. It doesn't care that its policies are pushing young people to take up arms because there is nothing for them and they have nothing left to lose.'
The government may have the tanks and the Ninjas but, as a French observer told me, the fundamentalists have all the cards - 'a bottomless pit of support from Algeria's no-hope slums, time on their side, and above all the moral high ground by defending a cause rather than merely interests'.
'I can't see how more of the same old repression will work any better than it has done so far - however much force is used,' said another observer. Everybody recites the same formula: 'For every terrorist you kill, two will take his place.'
And so, with appalling logic, the war grows worse. Guerrillas now control most of the mountain ranges - the same ridges held by the FLN against the French. Some areas have been abandoned by the army, and in towns only 30 to 40 miles outside the capital, control is divided between the army and the Islamic groups. There is talk of 'the army of the day' and 'the army of the night'. Although much support is certainly born of fear, the guerrillas enjoy considerable sympathy among the population.
Attacks by the guerrillas are no longer isolated skirmishes but well-organised ambushes. On one occasion two months ago, about 50 members of the security forces were killed in the Larbaa area; on another, 23 gendarmes and soldiers died near Oran. 'My impression was of a proper army confronting us,' said a survivor.
Once a week a television bulletin gives a round-up of terrorist activity: ever-larger caches of arms are seized and they are increasingly sophisticated - rocket-launchers, Israeli-made Uzi machine-guns and pistols fitted with silencers.
Algerians insist that not all the killings are carried out, as reported, by fundamentalists. Some are the work of anti-FIS vigilantes and pro-government death-squads.
Witnesses have told of men in uniform coming after curfew and abducting people, whose bullet-ridden bodies turn up again the next day.
Meanwhile, in the Islamic strongholds, Koranic law is being enforced: unveiled women are threatened, satellite dishes are torn down, music shops, hairdressing salons and discos are closed. Fundamentalists enter buses to separate men and women passengers.
Is there any way out? Algeria has a new president, Liamine Zeroual, 53, a retired general and former defence minister. He has promised dialogue and a break with the past, but few expect him to deliver.
Trained in France, the Soviet Union and the Middle East, General Zeroual is a relative hardliner, and is expected to step up the war, rather than wind it down.
'My prediction is that things will deteriorate on all fronts: violence will get worse and the economy will continue to deteriorate,' said one Western diplomat.
General Zeroual has the IMF looking over his shoulder, for Algeria is close to defaulting on its foreign debt. A rescheduling of those debts, expected at the end of this month, will almost certainly bring price rises, and in a country where coffee can no longer be found in the shops and people have to queue two hours for bread, higher prices could provoke a social explosion.
'Unless General Zeroual negotiates with the FIS now and lets their leaders out of jail, talks will be impossible,' was the earnest advice of a young Algerian. 'If he waits and lets the situation deteriorate, then in a year or two, the armed groups will be in power and Algeria will be finished.'