On a dimly lit road in Wazir Akbar Khan, the Upper East Side of Kabul, a couple of street kids gesture toward an unmarked iron gate behind which they assure us we can find what we are looking for. An Afghan guard gives us a wary once-over and opens the gate onto a dark garden at the end of which a door is slightly ajar. I open it and step into a world far removed from the dust-blown avenues of Kabul, where most women wear burqas and the vast majority of the population live in grinding poverty.

At one end of a long room is a well-stocked bar tended by a Chinese madam who assesses us with a practiced calculus. In front of her are more than a dozen scantily clad smiling young Chinese women sprawled over a series of bar stools and couches. Adorning the walls are red lanterns and large posters of Bruce Lee and Jackie Chan. Nestling next to the prostitutes are several mustached, glaze-eyed Afghan men who occasionally take unsteady steps onto a makeshift dance floor to bust some surprisingly graceful traditional moves. A couple of the women titter as they gamely join in. Welcome to Kabul, as David Lynch might imagine it.

Our party of four is soon joined by several of the women, who try to make conversation, most of which consists of "Me no speak English." Conversation is not really the point here when $60 will buy you more stimulating forms of intercourse. One of the prostitutes whispers in my ear, "You guys worry about the attacks?" She's referring to a massive car bomb that had blown up a day earlier a couple of hundred yards from the US Embassy, killing two American soldiers, one of them a 52-year-old female reservist, and more than a dozen Afghan bystanders. I arrived at the scene shortly after the attack and found body parts that looked like fried pieces of meat and bone scattered a couple of blocks away from where the bomb had exploded.

Kabul 2006 has a distinctly fin de siècle air. The hotel I stay at plays loungey house music at night and serves beer discreetly. It also has a makeshift bunker surrounded by sandbags in the event the hotel is attacked, a reasonable precaution given that in May an angry anti-American mob shot out the ground floor windows of another Kabul hotel. Suicide attacks are now weekly events in the capital, while an economy steeped in corruption and driven by the heroin/opium trade and foreign aid enriches an elite who party into the night, taking advantage of new freedoms that under the Taliban might have earned them a reprimand from the religious police (listening to music); landed them in prison (drinking alcohol); or had them stoned to death (sex outside marriage).

The Taliban owe some of their renewed strength to the fact that they can play on the fears of a generally conservative population who worry about corrupting foreign influences exemplified by the new brothels in Kabul. A hundred miles to the south of the capital, for instance, the Taliban have recently appeared in force in nearly half the districts of Ghazni province, which sits astride the key road between Kabul and the southern city of Kandahar. Around Kandahar this past summer fierce battles raged between the Taliban and NATO forces, who encountered much stiffer resistance than they anticipated. In September I embedded with soldiers from the 10th Mountain Division at a fire base on Afghanistan's eastern border with Pakistan. The Taliban launched rockets at the base on an almost daily basis, and foot patrols were regularly encountering Taliban forces. Three years earlier, when I was embedded in the same region with soldiers from the 82nd Airborne Division, their main complaint was how little action they were seeing.

Between the rising Taliban insurgency, the epidemic of attacks by suicide bombers and improvised explosive devices (IEDs), and spiraling criminal activity fueled by the drug trade, Afghanistan today looks something like Iraq in the summer of 2003, when the descent into violent conflict began. As a former senior Afghan Cabinet member told me in September, "If international forces leave, the Taliban will take over in one hour."

A year ago there was still some real optimism about Afghanistan's future based on President Hamid Karzai's popularity both at home and abroad, the flood of returning refugees and the millions of girls and boys starting school for the first time. That optimism is evaporating. In December 2005, 77 percent of Afghans polled by ABC News said their country was going in the right direction. When asked again one year later, only 55 percent felt the same way.

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