GIBRALTAR - A heavy cloud of fine perfume fills the inside of the synagogue. A hundred men or so sit on the thick wooden benches. The early evening prayer service is over and they are waiting for a study session with Yeshayahu Ben-Naim. Two enormous chandeliers hang from the high ceiling, with dozens of tiny bulbs suspended from them like drops of water. The day has ended, but the strong Mediterranean sun has not yet set. An errant seagull appears from time to time at the window, a reminder of how very close the sea is.

Built in 1781, Nefutsot Yehuda is one of four synagogues that serve the 650-strong Jewish community of Gibraltar. The marble walls and old copper decorations attract the attention of anyone used to more modest houses of worship in Israel. But that is not all. When Ben-Naim, himself a member of the community, begins to speak, the content of what he says is surprising as well. The subject his talk is why one should perform mitzvot, the prescriptions of Jewish religious law. Is it to fill a social need, or to show obedience to authority, or is it a matter of personal choice? "I want to quote Aristotle," Ben-Naim begins.

A quick glance around: No one is astonished, no one objects. It seems one can talk about Aristotle, even in a synagogue, and the chandeliers will not come crashing down. Ben-Naim goes on to talk about Thomas Aquinas, one of the most important intellectuals of the medieval Christian church, and to quote from Thomas Hobbes' "Leviathan." He demonstrates how the questions these philosophers address are represented in the Torah and the Talmud.

In Israeli terms, we would call this an Orthodox synagogue. The worshipers themselves, despite the fancy suits and fine perfume, define themselves as Haredim, ultra-Orthodox. And yet, here at the opposite extremity of the Mediterranean Sea, it is permissible for a Jew to test his own faith against others, to read Aristotle and Hobbes, to be versed in books beyond the Jewish sacred texts. In Israeli terms it is almost sacrilegious. Aristotle in the synagogue? Thomas Aquinas to top off the evening service?

The mixture of ultra-Orthodoxy and modernity, religious fervor and openness, characterizes the Jewish community. Here it is just one element of the contradictory reality of the social and political entity called Gibraltar. Perhaps it is also the key to understanding why this strange creation is regarded as a shining example of harmony between different religions, different denominations, different nationalities.

Coveted and conquered

From a distance all you see is a cliff. It rears out of nowhere to a height of several hundred meters (almost 1,400 feet). No more than 6.5 square kilometers (2.5 square miles) in area, Gibraltar is a headland that thrusts out into the Mediterranean from the southern tip of the Iberian peninsula. You see the sea from almost everywhere. Africa is close: Even just a short climb gives you a view of the Moroccan coast. One does not need to be a military expert to understand the strategic importance of the place. One can see every passing ship with the naked eye, and monitor, in fact, the trade route between the Atlantic Ocean and the Mediterranean Sea. That is the reason why a string of empires - Phoenician, Greek, Roman, Muslim, Spanish and British - so coveted the Rock and sacrificed so much to conquer it.

Until the middle of the 20th century, Gibraltar was seen as nothing more than a British military base. No one here talked about local identity or autonomous government. In 1713, Spain had conceded Gibraltar to Great Britain as a permanent possession (unlike Hong Kong, which was passed over to Britain for 99 years). Britain viewed Gibraltar as another of its long list of colonies, an inseparable part of the empire on which the sun never sets.

With the wave of post-colonial awakening in the 1950s and '60s, however, a demand for self-determination began to be heard. No one here wants to think about full independence from Britain or a return to the bosom of Spain. They say in Gibralter that to turn in a British passport for a Spanish one is like swapping one's mother for somebody off the street. What they fought for was recognition of the will of the residents, not just British imperial interests. Today, Gibraltar enjoys a high degree of autonomy in the economic and judicial spheres, while Britain only retains control of foreign affairs, military matters and security. Officially, Gibraltar is administered by a governor appointed by London, but the local parliament and government run all domestic affairs.

All in all, it's a pretty strange place: a sliver of land that remains a bone of contention between Great Britain and Spain. The name has Arabic origins, however: Jabal Tariq, Mount Tariq, after the Muslim leader who invaded across the straits in 711. This is where John Lennon and Yoko Ono, the prophets of world peace, chose to get married in 1969; but their country, Great Britain, keeps a nuclear submarine permanently stationed in its territorial waters. The gross domestic product is the equivalent of $42,000 per capita, putting it in 10th place world-wide, ahead of Britain, France and Germany - and yet it is hardly more than a village, even if the residents don't like that definition.

Most of the 30,000 residents live in apartment buildings on the western slopes of Gibraltar. Because land is at such a premium, there are almost no single-family homes. Tractors and bulldozers are always at work, dumping earth into the sea to reclaim a few more square meters of land for building more apartments. The one artery - Main Street - slices through the town from north to south. The tiny airport receives only two or three planes daily, at which times the road between Gibraltar and Spain is briefly closed because it intersects the runway. Gibraltarians joke that cars don't have to use a directional signal: Everybody knows where you're heading.

British shrine

When Ben-Naim ends his talk in the synagogue, a slim, well-tanned man approaches me. "Come to my office after the service," he says, "You must have lots of questions to ask me." I have no clue who he is, but at this point everybody in the synagogue knows about the Israeli journalist. We walk in the direction of Governor's House, no more than 200 meters away, and settle into my host's real estate office nearby. Solomon (Momi) Levy, aged 70, could easily play the part of a British playboy on the Costa del Sol. He is dressed in a white linen shirt, beige pants and brown moccasins, with gold rings on most of his fingers. He looks like he just stepped off the plane for a long vacation in the south of Spain. But Levy, it turns out, is an Orthodox Jew who was head of the Gibraltar Jewish community until a few years ago. He wears a skullcap, by the way - but only on the Sabbath.

Levy's office is like a museum and a shrine to the British presence in Gibraltar. Apart from the banner of the Arsenal soccer club that flaps outside, there are dozens of pictures and proclamations of Winston Churchill and Lord Nelson (two of Levy's heroes), thousands of tiny toy British soldiers in battle gear, a photograph of Levy with Queen Elizabeth (whom he affectionately refers to as "the aunt"), and a few prominently displayed signs announcing "Smoking permitted here."

Levy was born in Gibraltar. His basic belief is that Jews should not withdraw from their surroundings. Let them preserve their religion, even passionately, yes - but let them not cut themselves off from the world. That is the only way, he says, not only to keep the community alive, but also to win the respect of those around it. In the 1960s, for example, he became the first Jewish soldier in the British battalion stationed in Gibraltar. "For a long time I ate only hard-boiled eggs and smoked salmon," he says, "because of kashrut [Jewish dietary laws]. But it was very important to me. Jews have to participate in everything that the society at large does. I see myself as a religious person. God is beside me at every moment in my life. I put on tefillin [phylacteries] every morning and never miss the evening service in synagogue, but that doesn't mean I can't do what everyone else does."

In the local army he belonged to a unit that was responsible for the cannons on the summit of the great Rock of Gibraltar. Even today, they fire shells into the open sea every now and again - a sort of imperial custom to emphasize their presence. "The problem was what to do on Shabbat," says Levy. "I didn't know if it was permissible to take part in the ceremony, even if all I did was shout the order to fire. I asked my rabbi. He asked me what I did exactly. 'I can can get by with only shouting,' I told him. 'And what do the others do?' he asked. 'They are the ones that shoot,' I answered. 'So you can keep shouting,' he said."

Levy is a proud son of the British Empire. In one of the rooms of his office hangs a framed placard from the World War II with an inscription in Yiddish: "After everything Britain has done for the Jews, the Jews will do everything for Britain." Two days after our meeting, at the ceremony of the changing of the guard outside Government House, he removed his white, brimmed hat when the orchestra played "God Save the Queen."

But there is a very warm place in his heart for Israel. On his frequent visits, Levy says he likes to go to Cafe Rimon on Tel Aviv's Ben Yehuda Street, to watch the girls. "It's like a resurrection of the dead," he says with a faint smile. Suddenly he stands up, and pulls out a small framed picture from behind a pile of documents. It's from a trip to Brazil, he says. His wife doesn't let him show off the picture, but there he is, delightedly hugging two almost naked Brazilian dancers, who are clearly not Orthodox. "A person must enjoy life," he explains. "That's my motto."

A real dilemma

The 1834 census in Gibraltar listed 2,000 Jews out of a total population of 6,000. With time they were joined by Sephardi Jews from London, and a fourth synagogue was opened. During World War II, the British decided to evacuate all the civilians to London and to leave only a military force behind in Gibraltar. When the war ended, the exiles faced a real dilemma: returning to Gibraltar in order to try to restore civilian life there, or staying in one of the world's most vibrant and important capitals.

The years after World War II are regarded as Gibraltar's most constructive era. The two heroes of the enterprise were the Jewish chief minister of the local administration, Joshua Hassan, and the ruler of Spain, Francisco Franco.

Hassan, Momi Levy's uncle, was Gibraltar's most important politician in the second half of the 20th century. As head of the Labor Party there, he won the elections 10 times in succession. He was the first local leader to demand that Great Britain give the residents of Gibraltar a more meaningful say in running their lives. To this day, many see him as the father of Gibraltar politics. Hassan is the symbol of Jewish integration into society, but is also regarded as the leader of all Gibraltarians and not just the Jews. There were several Jewish ministers in the local government during his long terms of office, and for a few years there was even a Jewish mayor as well. During his funeral, in 1997, almost all the citizens thronged the streets to pay him their last respects.

Hassan was the one who led the little territory through the deep crisis with Spain, which, in 1969, closed its border with Gibraltar for 16 years. Franco's idea was to exert economic pressure on Britain and on Gibraltar, but the sense of siege only helped forge an independent local identity and, beyond that, to foment deep hatred for Spain.

The hatred of Spain and of Franco in particular does not mean that they hate the Spanish in Gibraltar. Quite the contrary: The average Gibraltarian speaks fluent Spanish, prefers Spanish food to English food, and almost certainly prefers the Spanish climate. Today, Gibraltar and Spain have a cordial and open relationship and enjoy economic cooperation. During the summer vacation, a normal day for a Gibraltarian might begin with a cup of coffee on the Costa del Sol (1-2 hours by car), an appointment at the barber in Seville (2 hours), home for siesta, and dinner at a restaurant in a Spanish town. The night, of course, belongs to the Rock.

WWII crisis

The Jewish community of Gibraltar was not spared the crisis of World War II. Many Jews decided to stay in London; others emigrated to the United States. The community dwindled, and in 1950 - according to the community's unofficial historian, Mesod Belilo - it numbered just 500 Jews. This was already a different community, more English, more modern. People got married later and had fewer children. Many young Jews had non-Jewish spouses, and the Gibraltar community found itself faced with the No. 1 problem of Diaspora Jewry: assimilation.

The solution was to embrace religion. But anyone who thinks that religious devotion must imply fanaticism, extremism and seclusion, should meet James (Jaimito) Levy, Momi Levy's younger brother and the current president of the Jewish community. His law firm, Hassan's (named for his uncle, Joshua Hassan), is the leading firm in Gibraltar, and Chambers magazine named him one of the top 100 lawyers in Europe. Low taxes and an advanced banking and financial system (see box), led dozens of international companies to be registered in Gibraltar and to open branch offices there. Attorney Levy deals with a big portion of them. Most of his clients are foreign, among them Deutsche Bank and AIG. In Israel he has connections with the Herzog, Fox & Neeman firm and with attorney Yigal Arnon.

"Religion is a private matter," says Levy, 56, sitting in his office next to the Nefutsot Yehuda synagogue. "Genuine fear of God is an internal fear of God. I have very strong faith, but that does not mean that you have to have faith as well. The problem with religion is the coercion, the tendency to force it down people's throats. This [conciliatory approach] is perhaps part of the Sephardi Jewish tradition, which was far more indulgent than the Ashkenazi tradition. We are not divided into secular, traditional and religious. Here almost everyone believes in God."

The statistics on the community indicate that Levy is right. About 85 percent of the Jews in Gibraltar are religiously observant; 80 percent of the women go to the mikveh (ritual bath) as prescribed; the number of young people attending yeshivas or other religious educational frameworks is on the rise; and the synagogues are full, even on weekdays. Yet Levy has at least one foot deep in the secular world. He is a frequent presence in the law court, and is a highly respected mediator and arbitrator between English and Spanish clients. Some say his status is higher even than that of the governor. He does not sport a skullcap; and only once during the interview, when he picked up a glass of water, did he pull a black skullcap out of the inside pocket of his suit jacket, put it on, and whisper a short blessing. When he finished drinking, he returned it to its place.

"In Israel I would be considered Haredi," he says, "but I don't need a skullcap for that. God is with me every moment, but that is my private concern. I don't like to do things so that others will think that I believe in God. I don't like external trappings. For example - you tell me: If someone perpetrates an act of terror in the name of God, is it possible that he really believes in God?"

Levy's day begins at 5:30 A.M. when he immediately devotes four hours to religious study. He starts with the "daily page" of Talmud, continues to the synagogue for morning prayers, and then returns home for further study. Before leaving the house for his office, he washes his hands, dries them with one of the little Pierre Cardin towels set aside for that purpose, and puts on one of his Hermes ties. Only then does the second part of his life begin: his work as a lawyer.

Levy has Christian partners, whom he visits on their holidays. Occasionally, before taking a professional decision - whether to accept a particular case, or concerning what line to pursue - he consults the rabbis. On ethical issues, he says, he likes to hear another opinion. He has never encountered anti-Semitism, neither from the authorities nor from the populace. Curses, personal violence and swastikas daubed on synagogue walls that have become commonplace in so many places across Europe are merely distant news items for the Jewish community of Gibraltar.

Paradise and bayonets

Gibraltar has Roman Catholics (the majority), Anglicans and other Christian denominations, Jews, Muslims, Hindus and not a few atheists. The working assumption is that to build a successful and sophisticated multicultural society, they have to guard against any visitor with suspicious motives. The paradise that is Gibraltar relies therefore on very sharp bayonets. The local police force and the British military are regarded as especially tough. Patrolmen have started carrying automatic rifles, the coast guard makes no concessions and the law-enforcement agencies tend to carry out government orders immediately.

The tension is felt even on a journalist's short visit. When my Spanish photographer and I tried to photograph the Jewish school from the outside, a severe-looking policewoman immediately appeared and demanded an explanation. She was unimpressed when told about the article that would be published in Israel. She demanded identification and asked us to accompany her to the police station.

"In Gibraltar we relate very seriously to a photographer standing outside a Jewish school," she explained. "As far as I'm concerned, you could be two terrorists gathering intelligence." Within seconds, a white patrol car with flashing blue lights burst into the narrow street. Only the quick intervention of the Israeli consul, David Ben-Naim, and Levy, the head of the Jewish community, released us from the long arm of the law.