TOULOUSE - Monique Drey, the owner of a small cafe a minute's walk from the apartment of where terror suspect Mohammed Merah holed up, has experienced her share of terrorist attacks. She spent 10 years living in Jerusalem's Gilo neighborhood. On Wednesday, she was busy serving the dozens of journalists waiting for developments on the siege outside Merah's home, which only came to an end the following day.

"This is small potatoes for me," she laughed, speaking Hebrew with a heavy French accent. She did not know Merah, she said, but added that the few Muslim families in the neighborhood are "very quiet" and "are not extremists at all."

Merah, who was killed when he jumped from his window during a shoot-out with police yesterday, was suspected of murdering three Jewish children, their teacher, and three French soldiers in three different shootings this week and last. Drey, like most residents of France's fourth largest city, seemed to be responding to the attacks with repression and denial. Apart from the more prominent police presence, there was no real sense of fear in the busy streets and the packed residents.

Even on Tuesday evening, before police identified a young man born and raised in Toulouse as the lead suspect in the attacks and tracked him down in his apartment, local residents were walking fearlessly outside.

"It's terrible, but he is a lone nut," said Dominique Marais, a shop owner, as he dined with friends at a noisy brasserie on one of the city's broad avenues. "Why should we let him ruin our lives?"

The waiter, a young Jewish man named Roger Cohen, nodded smilingly. "It is not pleasant that Jews were killed, but I don't think there is any special cause for concern," he said.

The murders did visibly upset members of a few small groups: a very particular part of the local Jewish community, some Muslims (who came to the school's street to place flowers and light candles ), and the hundreds of journalists who came from around France and Europe to cover the worst anti-Semitic attack in Western Europe in three decades and the nerve-wracking siege that followed.

"I have covered wars in the Middle East, Africa and Asia, and I still don't believe I am now reporting from the city where I was born," said a veteran reporter from a French news agency during a coffee break Wednesday morning. "It's like this is not happening - this is a quiet, boring city. People think that if they ignore it, it will just go away."

No friction

It's hard to say how many Jews, or Muslims, live in Toulouse, since France does not record citizens' religion. Jewish community activists say there are 15,000 to 20,000 Jews and twice as many Muslims in the city. There is relatively little friction between the two groups. Most of the Jews live in the middle-class districts close to the city center, while most Muslims reside in the poorer south.

"We hardly have any problems with Muslims," the president of the Jewish community, Aryeh Ben Simhon, says. "In fact, there are hardly any relations with them. The Muslims here do not have an organized leadership."

"There were no serious anti-Semitic incidents for years here, until this week," says Elhanan Drey, Monique's son, who also spent several years living in Israel. "However, there is anti-Semitism that people don't want to talk about. Jews are subject to curses in the street. There is a lot of that, but no violence."

Dan Zikri, 18, is about to start studying business administration and until recently taught at Ozar Hatorah, the school where the shooting took place on Monday. "Jews do not want to be seen on the street wearing a skullcap, because that leads to shoving and even blows. Anyone who tells you it doesn't happen is simply ignoring it."

Rabbi Levy Yitzhak Matusoff, a Chabad emissary in Toulouse for 35 years and the principal of Gan Rashi, the Jewish primary school attended by the three murdered children, disagrees. "There is no atmosphere of anti-Semitism here," he says. "There are a few Arabs who rampage sometimes and some veteran French people who recoil from Jews a bit, but that is definitely not the majority."

He believes the larger problem facing Jews in Toulouse as well as France is assimilation.

"Our numbers are constantly dwindling, due to mixed marriages," says Matusoff. Many Toulouse Jews have no ties to the community, and only 30 percent of the city's Jewish children attend one of the city's three Jewish schools, he estimates. Most of the children at the Jewish institutions do not come from particularly religious families, and the small education system has to fight for every one of them.

The school has high walls, and surveillance cameras caught the shooter, who was dressed in black and wearing a helmet - but no one was watching the security footage in real time. After the attack on Monday, community leaders accused the municipality and the Interior Ministry of cutting back security at the school a few months ago. But community sources also admitted that the schools themselves had privately organized and paid for the security, and that they themselves had decided to cut costs. This was the only way to reduce tuition and attract parents, they said.

In the wake of the terrorist attack, Interior Minister Claude Gueant promised that the police would take responsibility for guarding the Jewish schools. Jewish community leaders publicly welcomed the declaration, but some said they wondered quietly if this was just an election promise.

Gueant, who is responsible for France's police and internal security, moved his headquarters to Toulouse this week and supervised the manhunt and the siege closely. In a meeting with Jewish community representatives on Tuesday afternoon, he said the investigation was still focusing on the far right and that he believed the terrorist was a neo-Nazi.

Yet early the following morning, after the special antiterrorist unit had surrounded Merah's home, he said the young Islamist of Algerian descent had been a security target for a few days at that point.

Police sources quickly leaked that Merah had been found after a computer belonging to one of his family members was used to search for information on a motorcycle owned by one of the soldiers Merah murdered. That motorcycle, which was used in the shootings, had been listed for sale by the soldier. The local motorcycle agency then reported that a young man had asked about disabling the GPS on a motorcycle of that model.

Ultimately, though, it was Merah who effectively turned himself in. Eary Wednesday morning, he called a senior journalist at the news channel France 24 to brag about his deeds, without giving his name. The station immediately informed the police, and Merah was tracked down soon afterward.

'Monsieur Securite'

All this happened a month before the first round of France's presidential election. The government is unlikely to establish a state commission of inquiry to find out how a young man who recently visited Pakistan and Afghanistan, who reportedly tried to recruit others to radical Islam, and who was being tracked by state security services, managed to carry out two nearly identical terror attacks over the course of four days and then went on to sleep soundly in his bed while France was carrying out the biggest manhunt in its recent history. During the many hours of negotiations with police, Merah claimed he had been planning another terror attack on the morning that police surrounded his apartment.

Meanwhile, the opportunity to present himself as "Monsieur Securite" has brought color back to President Nicolas Sarkozy's cheeks and is starting to boost him in the polls. The many cynics were quick to say that Sarkozy's order to take Merah alive was intended to make the standoff go on as long as possible. Every extra hour with Merah barricaded inside his apartment ensured that Sarkozy's rivals would not be able to resume their campaigning and remind the voters why they no longer want Sarkozy as president.

The slow response by French security forces would surprise Israeli observers. Even when they finally fired stun grenades into the apartment, it turned out to be another stage in the psychological warfare aimed at wearing down the gunman so that he would surrender and come out on his own.

If this had been Israel pursuing a suspect in the territories, the suspect would have received a short warning via loudspeakers, after which helicopters would have fired missiles at the building and bulldozers would have started to demolish it. French police officers explained that the attempt to end the standoff without having to use force was a cultural matter. In any event, there were no hostages inside, so time was not an issue.

Taken alive, Merah could have offered valuable information about the radicalization of young Muslims and how they get to Al-Qaida bastions in Pakistan. It's not certain whether the public will hear the more embarrassing details about Merah's last years in Toulouse, as he built up an impressive arsenal and planned his killing spree in great detail. Beyond the damage this would do to the security establishment, the interior minister and the president, this is a black box that no one in France - with the possible exception of neo-fascist candidate Marine Le Pen - wants to open.

As with the July 2005 terrorist attacks in Britain, when four British-born Muslim men murdered 52 people by bombing London's public transportation system, the latest attacks showed that France, too, is now facing a new kind of terror. These are not outsiders, but young Frenchmen who turned radical in French cities, took advanced courses in terrorism in Pakistan and returned home. Like the residents of Toulouse, the French establishment will probably try to ignore the implications, hoping the new home-grown terrorism will disappear on its own.