It's modern and Muslim, European and Asian, cutting-edge and conservative—and though at least two millennia old, thrillingly hip. Joan Juliet Buck succumbs to Istanbul's potent persuasions

Eleven-forty on a hot July night in the Dervis Café on the top of the first hill of Istanbul, halfway between Hagia Sophia and the Blue Mosque. Melon and apricots in front of me, espresso at my elbow, and a strange fragrance from the tables behind me, where men suck on water pipes, narghiles. A server circulates with a brazier, handing out pieces of burning charcoal with little tongs to stoke the pipes. Every now and then the nearest narghile emits a tranquil gurgling of bubbles, its user a contented exhalation. Squeaking toddlers waddle and crash around the tables. This is Sultanahmet, the Muslim Montmartre, on top of ancient Byzantium. Couples walk past the café, women in head scarves and long coats. A group of young girls flash by giggling, heads covered, their T-shirts bearing the name metallica.

In the Blue Mosque across the square, the Sultan Ahmet Cami'i, people have been praying for over two hours. There seems to be an art installation by Jenny Holzer on the outer wall of the mosque: Red LED letters race across it in an incongruous banner, scrolling giant words in Turkish and English. I scribble down what I can catch: "& and among you there should be a party who unite to good and enjoin what is right." Tonight is the anniversary of the prophet Muhammad's ascension, known as the Miraj, or Stairway to Heaven.

It's my first moment of peace, but I am still nervous. I arrived two days ago without my luggage. The Çiragan Palace Kempinski hotel, my first and grandest destination, sent up an emergency kit with toiletries, shorts, and T-shirts, all well cut and in my size. The hotel, in Besiktas at the edge of the Bosphorus facing Asia, is named for the nineteenth-century palace next door. Built on a dervish graveyard, it was home to three ill-fated Ottoman sultans and is now refurbished for stars, heads of state, and weddings. I had gone down to the hotel's hammam to be soaped and scrubbed by a timid young girl while an unseen boy played the flute. I had watched heart-shaped wedding fireworks erupt with loud bangs over the real Çiragan Palace. But something about Istanbul terrified me.

I first went during the oil crisis in December 1973, when it seemed that the game was up for the West. I was neurotically, superstitiously afraid that by returning to Istanbul I would see the fragile economic constructs of the world break once more. In 1973 the Pera Palas Hotel delivered Oriental mystique with dusty light from tall alabaster urns. We were young and clueless, endlessly trudging past shop windows that displayed only hubcaps. On the Galata Bridge, we stared at a dancing bear. In the basilica of Hagia Sophia, we looked up at the Byzantine mosaics from a.d. 537, masked by Arab calligraphy from 1453, when Mehmet the Conqueror turned it into a mosque. In Topkapi Palace, we contemplated emeralds the size of small bread loaves in a dusty glass case. My boyfriend attempted to rent a car to surprise his relatives in Bulgaria, but the rental agent said it was forbidden to drive beyond the Iron Curtain. Because of the oil crisis, there was no electricity in the Grand Bazaar. Shivering in the light of portable oil lanterns, I bought fistfuls of striped plastic combs. We returned to London babbling—alabaster urns! dancing bears! hubcaps! masked mosaics! emeralds as big as roast chickens! Soviet Union nearby but inaccessible! plastic combs; here, have one! Then the London stock market crashed, and it was four years of fiscal crisis, three-day weeks, brownouts, miners' strikes, the dour dip of the seventies.