By Anthony Shadid

The Washington Post

DAMASCUS, Syria Waving Syrian flags, thousands of people poured into the capital's Seven Lakes Square earlier this week in an orchestrated show of defiance over a U.N. inquiry that implicated the country's leadership in the assassination of former Lebanese Prime Minister Rafiq Hariri.

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.

The plight of Syria's neighbor casts a long, menacing shadow. It is bolstering the legitimacy of President Bashar 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," opposition activist Yassin Hajj Saleh, 44, said. "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."

Rumors of the government's demise fostered by the reported suicide this month of the powerful interior minister and rumored 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 Bush administration is brokering a series of steps designed to unravel the regime in Syria but not oust Assad's government at least not yet, U.S. policymakers say. The U.N. report into Hariri's killing has sparked a "transformation" in how the world is willing to deal with Damascus which Washington wants to cultivate, said a senior U.S. policymaker on condition of anonymity.

The 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.

The long-term U.S. goal is to break the 35-year hold of the Assad family and allow Syrians to freely pick a new government. But short-term, the Bush administration is somewhat reluctantly opting to let the U.N. investigation and the subsequent judicial process, combined with punitive U.N. sanctions, erode Assad's power and see if he then changes Syrian practices in the region, U.S. officials said.

The United States wants more aggressive efforts in closing the border with Iraq to foreign fighters and an end to 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 bolstered 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.

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.

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.

Though Syria is one of the region's most authoritarian states, its repression pales before the relentless brutality of Saddam Hussein's regime. While the Baath Party in Iraq relied 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.

But under Assad's five-year reign, the leadership circle has narrowed dramatically; many analysts say key decisions are taken by his family his brother, sister and brother-in-law.

The various wings of the opposition the Muslim Brotherhood, Syria's 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 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.

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.

In a best-case scenario, he said, a transition in Syria would cost dozens, perhaps hundreds of lives and 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, 74, a human-rights lawyer and outspoken activist.

Robin Wright reported from Washington.