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Grozny - the "menacing" city - lives up to its name. During the day it is calm but, at night, the shooting begins. Soldiers jump at shadows - and the shadows cast by the disfigured buildings are terrifying indeed.

Perversely, the dry crack of rifle shots brings a kind of relief, punctures the tension. It doesn't matter who is shooting: a rebel sniper, a drunken policeman, a nervous recruit. It's enough that the shooting is somewhere else and that Grozny is claiming other victims tonight.

All day, you can see plumes of dark smoke hanging over the Chechen capital, as if the battles here have only just finished and you are walking across a smouldering ashtray. These are the burning oil-wells. There are 26 of them across the city, consuming 6,000 tons of oil a day. It would cost less than $100,000 to extinguish each fire but the federal government claims it can't spare the funds.

At the heart of each plume, there is a curling tongue of flame. Towards evening, the fires look like tiny crimson sunsets swamped in greasy black clouds. And, for a moment, you forget that the fumes are poisoning the entire city, filling your mouth, your nose and your lungs.

People are already feeling the side-effects. A friend tells me that his hair is falling out - although he is still in his 20s. "My sister left Grozny because she was pregnant," he says. "She went to Moscow and prepared to be a mother. It's calmer in Moscow, and there's good medical care there -- but her baby was still-born all the same. It's because of the ecology, because of the stress."

Around 110,000 people have returned to Grozny, to join those who never left. Many of these -- Russians and Chechens -- spent the siege in cellars, emerging only during lulls in the bombing. Now they live in the blackened ruins, surrounding themselves with the trappings of the old life - teapots, strips of carpet, broken TV sets - in an attempt to simulate normality.

It has been years since life was "normal". A Russian woman, Tamara Vitaeva, says, "We didn't get a pension or wages under Maskhadov. We sold tins, pots and old clothing at the market to survive." They couldn't always be sure of getting their meagre earnings home - sometimes they were robbed in the street by men with machine-guns.

For many, there was no way out. "We were given the chance to leave Chechnya," says Vitaeva. "But they [the Chechen fighters] took my son, Gena, away - and where can I go without him. What if he comes back and his mother isn't there?"

Svetlana Kopeichikova's daughter was abducted by Russian soldiers. She can remember their faces clearly. She grabbed hold of the girl and tried to tear her away from the troopers but they turned on her and beat her so badly that most of her teeth were broken. She says that her daughter was held in Mozdok for four months before the Russian authorities released her. Now she's back with her mother but has never been the same since.

Most of the Russian inhabitants of Grozny congregate hopefully at the Church of the Archangel Michael which is now little more than a pile of rubble. There are no priests in Grozny - they were killed by Chechen fighters who claimed they were agents of the Federal Security Service.

There was a time when the Ministry for Emergency Situations arranged for food to be handed out at the church - but now officials are refusing to bring in the supplies. "We're not a cow to be milked!" one of them told me. There are no international aid organisations in the city either - convoys rarely get further than neighbouring Ingushetia where there are still 200,000 mouths to be fed.

Grozny's mayor, Supyan Makhchaev, commented, "Some representatives of humanitarian organisations came here but they took one look at the ruins, weighed up the volume of aid that was necessary and quickly left town. It's unlikely that they'll be back."

The city markets are gradually coming back to life. There is beer and alcohol next to the food products. Before the war, anyone caught selling spirits was beaten with sticks according to Islamic shariat law - but now the authorities have changed and the Chechens can make good money by helping the Russian soldiers to drown their miseries in alcohol.

In the suburbs, people live on whatever they can grow in kitchen gardens, small-holdings or even road verges. Even that can be a hazardous undertaking. A woman on Zabaikalsaya Street says the army has occupied the stretch of land where her plot is located. "There's a checkpoint nearby," she said. "When we went to plant our potatoes, the soldiers opened fire, shooting over our heads. They told us not to come any closer." Now the plot is covered with weeds and the woman's family goes hungry.

The city's mayor claims that the authorities have managed to return the water supply to 70 per cent of the city and gas lines are already being laid. Often the logic of the rebuilding programme is questionable - one of the first buildings to be repaired in Grozny was the Dynamo Stadium, in time for the Victory Day parade. Meanwhile, hospitals and schools remain untouched.

Repairs are being carried out with funds raised from local oil refineries which are producing around 1,000 tons a day. The federal budget has yet to make any substantial investment in the local economy.

But the people of Grozny have little faith in the federal government, just as they had little faith in their ethnic leaders. They are caught between men with guns who rob them at the market, or drive them back from the small patches of scorched earth which feed them. And on the walls of their makeshift shelters they daub the words, "People live here" and hope it will make a difference. Usually it does not.

Erik Batuev is a regular IWPR contributor