ON THE AVENUE Gramatan Avenue is part of a shopping enclave, along with Broad and Grand Streets, that has a grocery store along with a variety of shops, small businesses and restaurants.

IN many ways, the Fleetwood area of Mount Vernon, in southern Westchester County, is a home buyer’s dream, with its rich stock of Tudor, Mediterranean and colonial-style houses and Tudor and Art Deco apartment complexes.

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Many of the streets in Fleetwood are lined with carefully tended lawns and lush gardens. And perhaps most appealing is the 30-minute rail commute on Metro-North from Fleetwood Station to Grand Central Terminal.

Shawn and Sharyn Kaufman bought a 1930s three-bedroom Arts-and-Crafts-style house in Fleetwood last year for $550,000, drawn by its proximity to the city. “We would have paid far more in Tuckahoe or Bronxville, even for just an ordinary 1960s ranch,” said Mr. Kaufman, a lighting designer. Mrs. Kaufman runs a children’s theater group and was attracted to the growing arts community in Fleetwood.

But living there entails more than just enjoying the shopping on bustling Gramatan Avenue.

Fleetwood is the northern part of Mount Vernon, a city of some 68,000 people that shoulders the burdens of a 14 percent poverty rate, according to the most recent census. The crime rate is high, with 2,446 serious crimes — murder, rape, robbery, aggravated assault, burglary, larceny and motor vehicle theft — committed in 2007. And the public school system is troubled. The proposed school budget was defeated twice this year, forcing administrators to adopt austerity measures.

Not only have the city’s problems caused many potential home buyers to look elsewhere, but they have also prompted some longtime residents to flee. “Once my children finished elementary school, we were out of here,” said John D. Royce, the plumbing superintendent for the Buildings Department, and a father of three, who has since moved to nearby Eastchester.

W. L. Sawyer, the school district superintendent who was hired last fall, said he had recently found outdated social studies books listing Jimmy Carter as president that were still being used by students in Grades 7 through 12 at Mount Vernon High School, which is in the northeast part of the city, and serves students from throughout the district.

“In many Westchester schools, they worry about new scoreboards for their football fields,” Dr. Sawyer said. “In our school district, we have to focus on more basic needs.”

After the second budget was defeated in the spring, the district cut its entire interscholastic sports program.

The city’s “image problem,” as Clinton I. Young Jr., the new mayor, describes it, is not confined to the schools. Mr. Young was elected last fall on promises to reduce crime, end patronage in city government and increase the tax base, in addition to working with the school board to improve the public education system.

“We have problems not unlike any other urban community in America,” the mayor said. “Poverty has weighed us down.”

WHAT YOU’LL FIND

Unlike some of the other areas in Mount Vernon, Fleetwood has retained a small-town feeling. Many of its vintage homes are large and luxurious, competing in style and class — but not price — with those in the far more upscale communities of Pelham and Bronxville, which border Mount Vernon. Others homes are more modest, built on lots tucked between the larger homes.

The area blossomed into a bedroom community in the 1920s, as New York City residents began streaming north. Over the years Fleetwood grew, eventually encompassing all of the 10552 ZIP code.

Woven through Fleetwood are smaller neighborhoods with names like Hunts Wood, Aubyn Manor and Pasadena Park “that have been unofficially rolled into the entity of Fleetwood over the years,” said Robert J. Granata, former president of the Fleetwood Neighborhood Association and a sales agent for Houlihan Lawrence in Mount Vernon.

The area is also home to several prewar apartment complexes that have been converted to co-ops.

The centerpiece of Fleetwood is the shopping enclave along Gramatan Avenue and Grand and Broad Streets, close to the Cross County Parkway. In addition to an A.&P. grocery store, there are a variety of smaller shops — dry cleaners, a bagel shop, florists, a couple of bakeries and several restaurants.

There has been an influx of Brazilians in Mount Vernon in recent years; the most recent census data tracks the population as 60 percent black, 24 percent white and 10 percent Hispanic.

WHAT YOU’LL PAY

Fleetwood — which has some of the most expensive real estate in the 4.4-square-mile city of Mount Vernon — offers an array of prices for home buyers, from low-priced co-ops for first-time homeowners to more expensive houses.

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A two-bedroom co-op in a 1929 vintage three-story complex in Fleetwood has an asking price of $249,900. At the Park Lane, which was built in 1927, a co-op apartment on the top floor with three bedrooms and three baths, four exposures and 1,800 square feet of living space, is on the market for $475,000.

Typical of the 1920s architecture of Fleetwood, a three-story four-bedroom Tudor with stained-glass windows, gargoyles and copper roof finials is on the market for $549,900.

By contrast, a three-bedroom colonial in Fleetwood but with a Bronxville post office address and annual taxes of $26,848, is on the market for $1,385 million. Without the Bronxville address, the asking price on the house would be about $700,000, said Mr. Granata at Houlihan Lawrence. If it were in Bronxville, within that village’s school district, the asking price would be closer to $2.5 million, he said.

WHAT TO DO

Mount Vernon is so close to New York City that Samuel Spear Jr. and his wife, Kenya, both business consultants who live in the Park Lane Cooperative Apartments, sometimes drive south to the city for a night out on the town.

But many weekends Mr. and Mrs. Spear wife opt for more local spots, like the Bayou, a restaurant on Gramatan Avenue that features Louisiana crab cakes, crawfish pies and live music. For a movie, they often drive to Pelham, two miles away, to the Pelham Picture House, a 1920s theater.

For many Mount Vernon residents, the church is a major focus of social as well as religious life, said Mr. Spear, a deacon at Grace Baptist Church in the central part of Mount Vernon. The church was started by five black Baptist women in 1888 and runs many after-school programs for youth.

For youngsters during the summer months, Mount Vernon offers a variety of choices, including the 23-acre Wilson’s Woods in the southeastern section of the city. One of Westchester’s oldest county parks, it has an English Tudor-style bathhouse, a wave pool, water slides and a water playground.

THE SCHOOLS

The loss of the sports program has served as a call to action. “A battle is under way to reshape and reform the schools,” said Charles Stern, president of the school board.

Mr. Stern and his wife, Debra, who is president of the Mount Vernon Parent Teachers Association, live in Fleetwood and send their children to the public schools. They are among those spearheading an effort to ultimately raise $950,000 from private sources to reinstate sports.

The Mount Vernon City School District has 11 elementary schools, 2 middle schools and 3 high schools: Mount Vernon; the Nellie A. Thornton High School, which opened last year and is gradually adding grades; and an alternative high school, Nelson R. Mandela Community High School. Total enrollment in the school district is 10,046.

Dr. Sawyer attributed the defeat of the school budget to a number of factors, including “leftover feelings of mistrust” among the public about the inability of previous boards of education to address the needs of students.

But also, he said, because of the high rate of poverty in the city, many Mount Vernon residents — especially in the current economy — could not afford to shoulder a heavier tax burden. He also pointed to voters who send their children to private schools and, he said, are not vested in the public school system.

At Mount Vernon High School, of 424 students in last year’s senior class, 375 graduated. Of those, 45 percent went on to four-year colleges, 31 percent enrolled in two-year institutions, and the others chose either the military or employment, said Desiree Grand, a spokeswoman for the school district.

SAT scores for Mount Vernon seniors in 2007 were significantly below the averages for the state, according to the New York State Education Department. The Mount Vernon average test scores were 417 for critical reading, 410 for math and 415 for writing, compared with state averages of 491, 505 and 482 respectively, said Nellie Perez, a spokeswoman for the state.

THE COMMUTE

Metro-North’s Harlem Line stops at the Mount Vernon West and Fleetwood stations. The New Haven Line has a stop at Mount Vernon East. The 8:01 a.m. from Fleetwood arrives in Grand Central Terminal at 8:30 a.m. A round-trip ticket purchased at the station costs $15.50. A monthly ticket purchased on the Web costs $165.62.

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Archpartners

A TWOFER A rendering of the new condo on Irving Place that is offering buyers a way to get keys to Gramercy Park.

Two keys go to each of the 39 buildings that surround the park. Residents of those buildings can also buy keys, for $350 a year, but only about 400 are in circulation, and they can’t easily be duplicated, according to park officials.

Buyers at 57 Irving Place, a new condominium, are being promised access to the fiercely protected space, too. But what is unusual is that this address is near East 17th Street, a full two and a half blocks south of the park, which starts at East 20th Street.

And, yes, there’s a catch, says Robert Gladstone, the owner of Madison Equities, the Manhattan-based developer: To get inside the park, buyers must first become members of the Players Club.

Co-founded in 1888 by the actor Edwin Booth, the club faces the park and controls a pair of keys.

Acceptance into the club requires a letter of reference from a member, according to John Martello, the Players’ executive director. And if 57 Irving’s residents are accepted, which he fully expects, Mr. Gladstone, a new member, will cover their $1,500 annual dues for five years, he said.

“They’re not going to go back five generations to make sure you’re in the right family,” said Mr. Gladstone, who was married at the club in September.

The 11-story condo, meanwhile, will have nine floor-through units, from three- to five-bedrooms, as well as a three-level 6,800-square-foot maisonette with a garage and saltwater pool.

In every apartment, bathroom floors will be lined with bluestone, and each kitchen will have two wall ovens and two dishwashers.

Although 57 Irving, a $40 million development, awaits state approval, units are expected to be priced from $6.75 million to $18 million, said Mr. Gladstone, who will take a penthouse.

What do the park’s protectors think of the plan to slyly add more people to its gravel paths? They aren’t really fazed, they say, as not everybody who has keys uses them regularly.

For instance, no more than a handful of the Players Club’s 850 members visit the park during a summer week, Mr. Martello said.

Even residents new to the neighborhood, like those at 50 Gramercy Park North, a former hotel site that in 2006 was developed by the Ian Schrager Company into a 16-story 23-unit condo, haven’t measurably increased park use, says Arlene Harrison, president of the Gramercy Park Block Association.

“A lot of people who buy these expensive apartments are foreigners that aren’t necessarily always here,” said Ms. Harrison, who lives at 34 Gramercy Park East, an 1883 co-op.

In fact, the actual number of residents, and by extension park users, may be slightly dwindling, as developers continue to convert multiunit rentals into one- and two-family homes, Ms. Harrison said.

The 1865 red-brick Italianate at 22 Gramercy Park South, for example, once contained eight apartments but is being divided into two condos.

One of them, a triplex penthouse with three bedrooms and five baths, is listed for $11.5 million, says John Burger, a managing director at Brown Harris Stevens, who added that keys to the park may be a draw, but views of it are what really counts.

“It’s really just this little jewel in the heart of Manhattan,” Mr. Burger said. “You’re just not getting views like this anywhere else downtown.”

Mr. Mager, 27, had spent five years living in less-than-ideal conditions. When he rented the sunny two-bedroom apartment on West 153rd Street in Hamilton Heights, in Upper Manhattan, he concentrated on the great light and the $1,100 rent, which, split with a roommate, was truly affordable.

“I didn’t notice a lot of problems, but there were things that were totally obvious once I moved in,” he said.

The kitchen island was a few inches too tall. “I would have had to have stools specifically made to be at the right height,” Mr. Mager said.

And the island “was terribly made, like pieces of plywood nailed together.”

For three years in a row, when the heat came on, the radiator in the apartment upstairs leaked. A corner of his ceiling collapsed onto his couch. He used a bucket to catch the drips. He wasn’t bothered by the roaches and mice, which seemed to emerge from a fissure behind the sink, but “they signified other issues — a grossness lurking behind the walls,” he said.

Miserable at home, he spent as little time as possible there. By last spring, the rent had risen to $1,250.

Mr. Mager (pronounced “major”), who is from Fredonia in western New York, was also becoming disillusioned with acting. He worked mostly in musical theater, feeling that he sometimes landed roles because he fit the costume. He grew weary of endless auditions.

“Unless you play one part for your entire life, you are unlikely to get into a position where you are not going to have to audition all the time,” he said.

So, last spring, he took a job in the field of Internet advertising technology that increased his income fourfold. His first priority was to move.

This time, older and wiser, he planned to pay more and get more. Hamilton Heights was still affordable, and he had watched a positive transformation over the years.

“It has gone from having a certain dodginess to being pretty decent,” he said.

Luxury condominiums have risen on parcels that formerly held crack houses and burned-out tenements.

Mr. Mager also planned to avoid paying a broker’s fee. “I am totally capable of looking at an apartment and don’t need to pay someone extra for that,” he said. “I don’t feel I should pay a middleman.”

He knew he would be annoyed if he spent a few thousand dollars on a fee, especially because it didn’t guarantee a good housing situation.

“If I hate the place six months later, I can’t get my money back,” he said.

A friend did a computer search for “no-fee apartments,” and Rent Direct New York (rdny.com) popped up. The Web site lets people sign up at no cost and receive information about the approximate location, price and size of available apartments.

“The teaser worked,” said Mr. Mager, who then paid the $209 fee, allowing him to hunt for rentals costing up to $1,800 a month.

Mr. Mager’s price range was between $1,200 and $1,600, which would be split with a new roommate. (His most recent roommate, a friend from high school, was about to leave for a place of his own.)

Mr. Mager took a day off from work, rising early to call the superintendents and management companies of the buildings that he was interested in.

Several two-bedrooms, for around $1,600, were available at a West 148th Street building. He liked the superintendent, who “was on top of everything, and you could tell he cared,” said Mr. Mager, who was now alert to signs of bad maintenance and shoddy construction.

One apartment there was spacious and bright, but a big, ugly radiator pipe in the living room meant there was no place for a couch. Another had a similarly unworkable layout, where there was no place for a refrigerator in the joint kitchen-living room except in front of a window.

In most cases, the apartments in the buildings that he looked at were simply too small.

“If it wasn’t bigger than my old apartment, I was going to feel cramped,” Mr. Mager said. “I am trying to simplify. I am kind of a hoarder, especially when it comes to clothes. The more space I have, the more likely I am to be neat.”

A two-bedroom for only $1,350 was available on West 143rd Street, but “I didn’t get a good vibe” from the many people hanging out on the block, he said.

At day’s end, he saw a place on St. Nicholas Avenue between 141st and 145th Streets — a long, quiet block that includes a row of apartment buildings across from a City College parking garage. He was glad that the closest subway station was an express stop.

The only thing he didn’t like was the building’s old, slow elevator, but it was slated for replacement.

In the two-bedroom, “the first thing I saw was a huge closet,” he said. “My joke to my friends is, if I had a kid, I could put them in there and it wouldn’t be considered neglect.”

The kitchen had plenty of counter space, and “the countertops are this gorgeous black marble flecked stuff,” he said. “There are tons of cabinets and as a person who cooks, I was basically sold when I saw the kitchen.”

The neighbors whom he spoke to while he was entering and leaving all said they “really dug this building.”

Mr. Mager moved in early in the summer. The rent is $1,500. His share is $850 for the big bedroom off the living room. He is about to get a new roommate — a friend who is attending law school — who will pay $700 for the smaller bedroom off the kitchen.

He has identified only two shortcomings so far. The walls seem to accumulate scuff marks easily, and the bathroom is short on towel racks. But “the management company has been really on point,” he said.

If he is home during the day, he sees the super in the building. A plumbing problem was resolved within the hour. The elevator is currently closed for replacement, so he gladly walks up four flights.

Mr. Mager is currently adding art to his walls and buying furniture.

“I know people my age who move every year,” he said. “I don’t like to move a lot. I tend to settle, so I’m hoping not to have to do this again. In this building, they are constantly upgrading things, and that’s what I want to see. My friends all think it is a vast improvement.”

But her quiet, homey apartment, a duplex in a four-story town house, seems like a world apart from the madness. She bought the house in 1988 for $700,000 and has been tending the garden there ever since.

“It’s a real neighborhood where people care about people,” she said recently, while sitting in her ground-floor living room, which is filled with antiques and still has the original wide-plank pine floor. Two thumbnail-size pieces of concrete from the World Trade Center sit on one windowsill.

“My son was a tugboat captain hauling debris right after 9/11, and he gave me those,” she said. “Now he’s a pleasure boat captain in Dubai.”

Ms. Harvey recalled that when she bought the 1860s building, a group of neighbors gathered outside to critique the Colonial Williamsburg green she had chosen to replace the blue paint on her Philadelphia brick facade. In the end, she got their nod.

She proudly lives in Hell’s Kitchen, and resists the efforts of real estate brokers and others to call the area Clinton, or even the more recent moniker, Midtown West. (Some people shorten the name to Midwest, which has implications of cornfields as opposed to the turf of the Sharks and Jets.)

When Ms. Harvey arrived, she said, 10th Avenue was lined with prostitutes most nights, with one block reserved for blondes, one for transvestites, and other blocks for other specific desires. Crack was rampant, and AIDS loomed large in the neighborhood.

Ms. Harvey was unfazed. “I liked it here,” she said. “I thought, ‘This is so interesting.’ ”

She and her husband and their two children had long lived between two homes: a rental apartment on West 86th Street and a 65-foot Pacemaker motor yacht they kept at the 79th Street Boat Basin on the Hudson River.

But then her husband died, and the children grew up and moved away. Ms. Harvey, who has worked as a ballet dancer and in theater, in the antiques business and as an international development consultant who sometimes works with the United Nations, decided to buy a house.

The town house on West 44th had recently been renovated, with hand-carved entry doors and new crown molding on the parlor floor. She moved into the apartment on that floor and rented out the other three.

Since the ground-floor tenant never opened her back door or raised her shades, Ms. Harvey built a deck with a staircase descending to the garden, where a huge grapevine still grows. High-rises now fill the western sky, but the low view down the backyards is of old-time Hell’s Kitchen, with decks and fences, vines and flowers, and backyard detritus.

When the top floor, which has a skylight and high ceilings, became empty, she took that over and put her bedroom there, keeping the parlor floor for her kitchen and living areas. Since everyone in the building knew everyone else, she didn’t worry about locking the doors. Her Saluki dogs, Nimrod ha rishona and Nimrod ha shani, and Siamese cats, Leon Trotsky and Phoenix, would even wander in and out of the neighbors’ apartments at will.

None of those pets are still alive, but Ms. Harvey still talks about them. One time Phoenix climbed out the third-floor neighbor’s window and jumped over to a ledge. A crowd gathered. Just as the neighbor was about to climb out and risk his life for the rescue, the cat casually jumped to another ledge and walked inside, indifferent to the heroics.

When the ground-floor tenant moved out, Ms. Harvey poked through a floor in her parlor-level hall closet and found the original staircase going downstairs. After that, she created a 1,600-square-foot duplex with a high-ceilinged parlor floor and a ground floor with direct access into her overgrown garden. She gave up the top floor.

She lives a neighborly life and is active in the West 44th Street Better Block Association, which she says is one of the city’s oldest such groups.

“We fought Mayor Giuliani when he wanted to bring in an aircraft carrier to Pier 84 and make it into a heliport,” she said. “And we’re tuned in to the block, so if someone is ill, we look out for them.”

In 1992, to offset rising taxes and maintenance costs, she turned the house into a two-unit condo, selling the top two floors as a duplex to longtime tenants.

“There were plenty of town house co-ops, but this was one of the very first small condos in the city,” she said.

Lately, Mrs. Harvey has given the parlor floor to a friend from out of town who uses it as a pied-à-terre, so her bed is now downstairs, directly off the garden. She sometimes thinks of selling her duplex and moving into a neighborhood high-rise for a simpler life and a little extra cash. But for now she’s too rooted to move.

Demi Plie, her toy Manchester terrier, is 17 and loves hanging out in the garden. Pas de Chat, her Devon Rex cat, an unusual-looking beast whose breed was said to have inspired the look of Steven Spielberg’s character E.T., meanders around, too. Next to the fireplace is a metal sculpture of a cat that looks like Pas de Chat’s twin. There are ceramic figurines of animals that she has collected on her travels on steps and shelves throughout the apartment. It would be impossible to replicate this setting in a high-rise.

In October 2006, Pier 84, at the end of her street, was made into a park with a fishing area that offers poles, bait and instruction, as well as a fountain, a rowing club, a dog run, a water taxi stop and a restaurant. With that, life on West 44th Street has just gotten better.

“We had a pet parade with a red carpet down there,” she said. “The tugboat races are coming up soon. Falun Gong often protests against the Chinese government at the Chinese consulate across the street.

“If you want something quiet, then you don’t want to live here,” said Ms. Harvey, who seems to find great peace amid the noise.

A This lovely light-orange building was built in 1890 by a carriage manufacturer, A. T. Demarest & Company, and designed by Renwick, Aspinwall & Russell. The Demarest concern was established in 1860, and by the 1880s its factory, in New Haven, had 300 workers.

The Renwick firm is best known for its founder, James Renwick Jr., designer of major works like Grace Church, at Broadway and 10th Street, and St. Patrick’s Cathedral. By the late 1880s, the office was producing many relatively small commissions of very high quality, often for socially connected clients.

These include the small apartment houses at 9 East 10th Street and 39 East 10th Street, the fraternity house of St. Anthony Hall at 29 East 28th Street, and the loft building of the 10th Church of Christ, Scientist, at 171 Macdougal Street, which is now being reconstructed as a condominium.

Both the Demarest building and Carnegie Hall were designed in 1889, the latter by William Burnet Tuthill, so it is not very likely that Renwick, Aspinwall & Russell borrowed from Carnegie Hall.

For the Demarest building the firm used mottled iron-spot brick for a facade made impressive by the giant four-story-high arches.

This urbane design in a light palette has much in common with other high-style buildings of the period, like the 1890 Madison Square Garden (when it was actually on Madison Square) and the 1892 Judson Memorial Church, on Washington Square South.

Despite its notable presence, the Demarest building is not a designated landmark.

In 1893, The New York Times said the Demarest company had some 200 carriages, valued at $150,000, in the building. Demarest moved up to Broadway and 57th Street in 1909, and the 33rd Street building was converted to offices.

In 1913, The Times reported that a doctor from Berlin, Freidrich Franz Friedmann, had an office there and offered free treatment for tuberculosis. A thousand patients showed up, including 15-year-old Leonard Curatolo, who walked up from Elizabeth Street with his father, a shoemaker, and mother. Census records list the family as Italian. Only the boy spoke English. But the leasing agent prohibited Dr. Friedmann from treating anyone, and the Curatolos and everyone else were turned away.

It is not clear if Dr. Friedmann had a real cure for tuberculosis, but he was back in Germany in 1934, when The Times reported that the Ministry of Agriculture had denounced the “worthless” work of “this Jewish physician.” Dr. Friedmann lived until 1953 and died in Monte Carlo.

That Beaux-Arts Building

At Lexington and 55th

Q What is the date of the building I work in, at the northeast corner of Lexington Avenue and 55th Street, and who was the architect? … William Zinsser, Manhattan

A Babies’ Hospital, established in 1887, built this intriguing Beaux-Arts-style building in 1902 and constructed a seamless addition in 1910.

The architects were Edward York and Philip Sawyer, then just beginning their careers. They would become New York’s pre-eminent specialists in bank architecture. Later, they designed the Central Savings Bank at 73rd and Broadway.

Comparing their work with that of another more prominent firm, the classicist Henry Hope Reed said in a 2003 interview, “Oh, McKim, Mead & White were good, but they were certainly no York & Sawyer!”

The babies whom the hospital treated were usually seriously ill. In 1900, it reported that it had admitted 386 patients: of these, 178 were cured and 145 died.

In 1915, The Times reported on its front page about a disagreement at the hospital over the course of treatment for the “hopelessly deformed daughter” of Mr. and Mrs. Joseph E. Roberts. The child was born with her spinal cord protruding from her back — apparently what is now known as spina bifida — and she was paralyzed below her waist.

A physician at Babies’ Hospital, Dr. L. Emmett Holt, advised Mr. Roberts that the child would die soon, and recommended that no surgery be performed that might prolong her life. The Times said the father agreed. But Dr. Maurice Rosenberg, who had been called in as a consultant, protested that “the mission of a physician is to save life” and that any and all measures should be taken to help, even knowing the child would soon die. Dr. Holt’s opinion held sway, and the baby, named Mary Margaret Roberts, lived for only nine days.

Babies’ Hospital was later absorbed into the Columbia-Presbyterian medical complex in upper Manhattan, and the building was ultimately converted to offices.

Now, a century after its construction, York & Sawyer’s building has been only moderately altered. It still has most of its heavy rusticated limestone on the lower two floors, with an intricate frieze and complicated Parisian-style brick and limestone decoration above.

Even the cornice and delicate iron balconies are intact, making it an unusually civilized gesture on a jangling stretch of traffic-choked Lexington.

OWNERS of one-bedroom apartments in Manhattan may be surprised if they put their homes up for sale anytime soon.

Price appreciation for one-bedrooms — long a bastion for singles and newly married couples who want to stay in Manhattan and live close to work — is sluggish compared with other types of apartments.

Buyers, many of whom are having difficulties getting mortgages, are unwilling or unable to pay the prices sellers still expect. And by one estimate one-bedrooms have been taking nearly three weeks longer to sell than bigger, or smaller, apartments.

Although the average sale price for a one-bedroom apartment grew by 7 percent in the last year, overall apartment prices in Manhattan jumped by 21 percent — not including condo sales at the ultra-expensive 15 Central Park West and the Plaza Hotel — according to Halstead Property.

“If you want to look at what area is experiencing the least amount of growth, it’s one-bedrooms,” said Gregory J. Heym, the chief economist who works for Halstead and for Brown Harris Stevens. “It is the lowest increase of any size category.”

That is a notable change from the situation a year earlier. From the second quarter of 2006 to the second quarter of 2007, prices for one-bedrooms rose by 10 percent, while overall apartment prices rose by only 7 percent.

Now that has changed. One-bedrooms are sitting on the market largely because the buyers most likely to purchase them can’t get mortgages. “Getting financing is very challenging,” said Diane M. Ramirez, the president of Halstead Property. “It can be difficult if the buyer of the one-bedroom is a first-time buyer. Some of the buyers who were able to get financing when the banks were throwing things at them are gone, and the requirements are stiffer.”

The number of studios available for purchase is not piling up in the same way because there are fewer of them, Ms. Ramirez said.

Brokers say that many people who bought their apartments at or near the top of the market and now must sell are often simply trying to avoid losing money on the deal.

In May 2007, John and Wendy Penn bought a one-bedroom on West 72nd Street for $650,000. The couple, whose main residence is on Long Island, wanted an office and a pied-à-terre in Manhattan to expand their insurance business.

They bought the apartment as a long-term investment and quickly completed about $30,000 in renovations, including the restoration of the apartment’s prewar details. But when Mr. Penn became an independent insurance agent, he no longer needed space in Manhattan.

So in February, the couple put the apartment up for sale, pricing it at $769,000. Three price cuts later, the apartment is listed at $725,000 and still has not sold.

Their broker, Danica Cordell-Reeh of Halstead, said that the Penns have the burden of finding a buyer who will pass the co-op board when most buyers’ assets have shrunk in value because of Wall Street declines. She has shown the apartment to about three dozen prospects and received three offers.

Looking back, the Penns wish they had negotiated more with the first prospect, because the second and third bidders’ finances were not solid. Ms. Cordell-Reeh advised them not to accept offers from buyers who might ultimately face rejection from the co-op board.

The Penns never thought they would have such a hard time. While their apartment is on a less-desirable low floor (the first), it is newly renovated and has a flexible floor plan, giving new owners the ability to change the location of the kitchen and the bathroom if they choose. “Hopefully, we’ll get close to breaking even,” Mr. Penn said.

But sellers of one-bedrooms might be even worse off, if not for changes in recent years in the Manhattan apartment mix. In the 1980s, developers built one-bedrooms for a market dominated by professionals and young couples, and investors who planned to rent out their units.

But by the time the latest construction boom started, the mix of buyers had changed. Developers found that building large apartments for wealthy families was more profitable in many neighborhoods, because more families were willing to pay a premium to stay in the city.

On the Upper East Side, the Worldwide Group built only five one-bedrooms in its 77-unit building at 255 East 74th Street, choosing to focus mainly on three- and four-bedrooms.

Even around Madison Square Park, a neighborhood that attracts many singles, the Clarett Group included a relatively low number of one-bedrooms in its new building at 11 East 29th Street. Veronica Hackett, the firm’s managing partner, said there were only 23 one-bedrooms in the 139-unit building. “I tend to believe that when people buy, they stretch to buy a two-bedroom instead of a one-bedroom,” she said.

But even though developers have not concentrated on building smaller apartments, there are more one-bedrooms on the market now than there have been in at least 20 years, according to Jonathan Miller, chief executive of Miller Samuel Inc., a real estate research company.

There are also more one-bedrooms available than apartments of other sizes. As of July 30, there were 3,390 one-bedrooms or sale in Manhattan compared with 3,229 two-bedrooms and 1,063 studios, according to data tracked by StreetEasy.com.

Mr. Miller has found that one-bedrooms sit on the market longer than any other size of apartment. He sees “a drag in demand on one-bedroom units, which is allowing inventory for one-bedrooms to be disproportionate to others.”

This is a tough time for sellers who are moving for job-related reasons. Rabbi Tom Gardner, who recently accepted a job at a synagogue in Baton Rouge, La., needs to sell his one-bedroom on Riverside Drive at 101st Street. Because he has sublet the apartment before, he cannot do so again under his co-op’s rules.

He bought the apartment for less than $400,000 in 1998, and last year, he was told he could sell it for $750,000. But by the time he put it on the market at the end of April, he set the asking price at $695,000, based on advice from his broker, Susan Faber of Barak Realty. Since then, the number of similar one-bedrooms for sale in his neighborhood has grown sixfold, Ms. Faber’s colleague Antonio del Rosario said.

After getting few offers, Rabbi Gardner cut the price to $650,000. When a buyer offered him less than $600,000, the rabbi made a counteroffer of $630,000. The buyer said no.

Despite the time pressures he faces, Rabbi Gardner is reluctant to yield on what he believes is the inherent strength of the unit he owns. “I think there’s still a certain value to an apartment in a full-service building on the Upper West Side,” he said.

Other sellers are even more determined to wait for the price they want.

Three years ago, Kenneth Kuo, a concert cellist who owns music schools in Manhattan and in Greenwich and Westport, Conn., and his cousin bought a one-bedroom at 120 Riverside Boulevard at Trump Place, the building where Mr. Kuo lives in a one-bedroom penthouse. They paid about $675,000.

They have been trying to sell the investment apartment for the last six months, but they are determined not to accept less than $1 million.

Mr. Kuo has a list of other sales in his building through the middle of 2007 that indicate the asking price for his apartment is in line with the building’s sales history. He also says that last year, he sold another one-bedroom he owned in the building for $790,000 after buying it in 2005 for about $550,000. He thinks he was justified in waiting for a high price.

But he was willing to consider a slightly lower bid. “Even if I could get $999,999, I would be happy,” he said. “There are just so many one-bedrooms out there on the Upper West Side.”

Late last month, he cut the price to $1.015 million. He also listed it for rent at the same time, on the advice of his friend Andy Kim, a broker at Nest Seekers. He had a tenant in a week willing to pay $3,400 a month, and plans to try to sell the apartment again in a few years.

For buyers, the growing inventory of one-bedrooms is enabling them to negotiate good deals.

When April Hartstein shopped for a new one-bedroom condo in Williamsburg, Brooklyn, in April, she asked brokers whether developers would negotiate. By the time Ms. Hartstein found her ideal condo at the Jacksonia at 131-145 Jackson Street, she had learned that many costs were negotiable. She persuaded the developer to pay her $7,000 transfer tax, build a second larger closet in her bedroom and cut the price by about 3 percent. (Apartments like hers are priced at $495,000 to $499,000.)

Ms. Hartstein stresses that she had to push, but that she found many developers would work with buyers. “No one just offered,” she said. “No one was like, ‘This is a slashed price.’ ”

Christine Blackburn, the Prudential Douglas Elliman broker overseeing sales at the Jacksonia, acknowledges that there are many one-bedrooms for sale right now in Williamsburg and relatively few larger apartments available. In Brooklyn, developers built more smaller units than in Manhattan to cater to younger first-time buyers.

She said that developers realized they had a lot of competition. “They built a lot of one-bedrooms, and there’s heavier competition in that market,” she said. “It’s a supply-and-demand thing.”

In this market, some buyers are finding that they can get apartments that would have been out of reach before.

Adam and Zena Rudzki had been searching for a one-bedroom near their daughter‘s home in Washington Heights for the past year. They found a one-bedroom at Cabrini Terrace, 900 West 190th Street, for $350,000. The apartment, listed by Simone Song Properties, has river views. They negotiated a $5,000 reduction in the price and closed on the apartment last week. “We had the luxury of looking and waiting for something that is reasonable in price” and attractive, Mr. Rudzki said. “We are very pleased.”

Bargain-hunting one-bedroom buyers are finding that the longer they wait, the more opportunities they are offered.

In March, Bruce and Eva Forrest started looking for a one-bedroom near Madison Square Park. The couple, who live in Rockland County, weren’t in a rush to buy. They intended to use the apartment as a pied-à-terre, and they wanted to make sure they found an apartment big enough for their 4-year-old son, Alexander, to run around in.

By June, they had a contract for a one-bedroom at the Stanford, 45 East 25th Street. The Forrests negotiated the price down to $867,500 from $875,000 with the help of Jenet Levy of Coldwell Banker Previews International.

But when the sale was delayed, Mr. Forrest looked at the market again. He noticed that prices for one-bedrooms had dropped 5 to 8 percent and that more sellers of one-bedroom co-ops were advertising that they would accept buyers interested in pieds-à-terre.

Although he is happy with the deal he had negotiated on his apartment and plans to close on Aug. 11, he notes that there are even more one-bedrooms to choose from today than when he found his apartment.

“It was amazing how much property was on the market, and it was amazing that it was sitting there,” he said.

The four-page signed submission, filled with arguments and accusations, also went into greater detail about the deal that Mr. Karadzic, the former Bosnian Serb leader, contends he made with the United States in 1996 to help him evade justice.

Mr. Karadzic had begun to read the letter out loud on Thursday during his first appearance before the international tribunal, but the judge stopped him, saying he would have only two minutes to speak. Mr. Karadzic was invited to submit the letter to the registrar, whose office translated it from Serbian and released it as a trial document.

In the letter, he offered bitter criticism of the former American envoy Richard C. Holbrooke; Mr. Karadzic claimed in court on Thursday that he had brokered a deal with Mr. Holbrooke that would enable him to avoid a trial. Mr. Karadzic also asserted in the letter that Madeleine K. Albright, secretary of state at the time, had proposed that he drop out of sight by opening a private clinic somewhere abroad.

Ms. Albright suggested that “I get out of the way and go to Russia, Greece or Serbia and open a private clinic or at least go to Bijeljina,” he wrote.

Mr. Holbrooke, who brokered the peace agreement that ended the war in the Balkans in 1995, denied that he had agreed to any deal with Mr. Karadzic, calling the accusation “ridiculous.”

In an interview, Mr. Holbrooke said that in July 1996 he had traveled to Belgrade and, over 10 hours of talks, negotiated a signed agreement forcing Mr. Karadzic to resign as the Bosnian Serb leader, with Slobodan Milosevic, then the president of Serbia, also pressing him to quit.

“There was an agreement he would leave power,” Mr. Holbrooke said. “He got nothing in return.”

During the hearing on Thursday, Mr. Karadzic was required to hear a summary of his indictment. Occasionally twitching his mouth, he stared straight ahead as Judge Alphons Orie cited from the catalog of crimes from the ethnic war that he led in Bosnia and that turned into genocide.

But Mr. Karadzic became more animated in court when he began to list his grievances, what he called the “many drastic irregularities.” His written statement elaborates on old rumors that Mr. Holbrooke had brokered a deal with him to avoid arrest.

The offer, he asserted, required him to withdraw from public life, declining all interview requests and offers to write articles or books.

“Mr. Holbrooke undertook on behalf of the U.S.A. that I would not be tried before this tribunal and that I should understand that for a while there would be very sharp rhetoric against me, so that my followers would not hamper the implementation of the Dayton agreement.”

That agreement, which ended the Balkans war, was negotiated and signed in Dayton, Ohio.

Mr. Karadzic, who was arrested in Belgrade on July 21, according to the Serbian government, described in the letter his life after leaving office in 1996. He said that he had kept his side of the bargain, lying low to avoid the attention of international troops “whom I used to pass quietly,” and also to avoid “possible adventurers and glory hunters.”

Mr. Karadzic also contended that the State Department had urged the tribunal’s chief prosecutor, Richard Goldstone, who had indicted him a year earlier, “to refrain from hunting me.” Mr. Goldstone threatened to resign “if this happened,” he wrote.

In a telephone interview on Friday, Mr. Goldstone, who was the chief prosecutor from 1994 to 1996, scoffed at the claims. “I cannot imagine what he is talking about,” said Mr. Goldstone, a South African judge. “The whole thing does not make sense. Resign because of what?”

Mr. Goldstone said the United States had not asked him to withdraw Mr. Karadzic’s indictment. “No one could ask me to do that,” he said.

Mr. Karadzic said that he had tried to meet his end of the deal, but that it eventually became apparent that there were attempts to have him killed — and he blamed Mr. Holbrooke for them. “It is clear that, unable to fulfill the commitments he had undertaken on behalf of the U.S.A., he switched to Plan B, the liquidation of Radovan Karadzic,” he wrote.

Some observers of the trial of Mr. Milosevic, the former Serbian president and Mr. Karadzic’s mentor, said they saw parallels between the men. Mr. Milosevic often used his time in court to criticize and try to embarrass the West.

Christian Schwarz-Schilling, a formal international envoy to the region, told German radio on Friday that he did not rule out that Mr. Karadzic would reveal embarrassing secrets during his trial.

“I believe Karadzic knows certain things which in any case aren’t pleasant for the international community,” he said. “I suppose that he, having been involved in the events, will have to say some new things which were unknown until now.”

These might involve what other governments knew in 1995 of the impending seizure of the United Nations-protected enclaves of Srebrenica and Zepa by troops under Mr. Karadzic’s command, assisted by forces from Serbia. The fall of Srebrenica ended with the execution of nearly 8,000 unarmed Bosnian Muslim men and boys.

The allegations in Mr. Karadzic text, including his fear that Mr. Holbrooke was, and still is, out to kill him may seem like the fruits of a fevered mind.

Mr. Holbrooke has insisted that there was no deal for immunity for Mr. Karadzic. But he may well have left room for ambiguity or provided hints during talks in Belgrade that Mr. Karadzic took to be a promise that international troops would not arrest him.

In his book “To End a War” (Random House, 1998), Mr. Holbrooke wrote that in 1996, heading for the talks to persuade Mr. Karadzic to give up power, he called Strobe Talbott, then the deputy secretary of state. He wrote that Mr. Talbott told him, “Just use that old creative ambiguity.”

The nationalization of the bank would extend to the financial sector a series of takeovers, which Mr. Chávez initiated last year, in industries including oil, telecommunications, electricity and steel-making.

Mr. Chávez further shook the political establishment and financial markets on Friday when he disclosed that he had used his decree powers to issue 26 laws on Thursday. They included a banking reform, although the government did not provide details on any of the laws the president decreed.

The central bank was similarly vague in its attempt to reassure depositors that the banking system was solid. It said it had enough reserves to guarantee normal financing operations throughout the economy, but did not provide new figures on its reserves, which are thought to exceed $30 billion.

On Thursday, Mr. Chávez announced plans to nationalize the nation’s third-largest bank, Banco de Venezuela, owned by the Spanish financial giant Santander. Compensating Santander could cost the Venezuelan government more than $2 billion, banking analysts here said.

Although Mr. Chávez had earlier threatened to nationalize Spanish-owned enterprises in retaliation for European immigration measures, his move surprised investors. He returned from a trip to Spain last week and assured Venezuelans that he had mended relations with King Juan Carlos, who famously told Mr. Chávez to “shut up” at a summit meeting last year.

Pavel Gómez, an economist with ODH, a financial consulting firm here, said Mr. Chávez’s government could build 500 schools for an estimated 500,000 students with the money needed to pay Santander for the takeover of Banco de Venezuela. “The true cost of this measure to Venezuelan society is open to debate,” Mr. Gómez said.

Mr. Chávez said that a Venezuelan banker had asked for his approval to buy Banco de Venezuela from Santander, a plan that the president overruled. Reports here identified the banker as Victor Vargas, a flamboyant financier whose daughter is married to the great-grandson of Francisco Franco, the deceased Spanish fascist.

“It’s possible that Santander saw the clouds gathering on the Venezuelan economy and is relieved to just get out,” said Orlando Ochoa, a financial analyst here. “But this move also destroys some of the pragmatism recently introduced into policies trying to stave off a crisis among the banks.”

Venezuelan bonds fell Friday for a second day, with the nation’s debt trading at more than 6.5 percentage points above United States Treasury securities. That puts Venezuela behind only Argentina, also struggling with rising inflation, in economic risk measures of large Latin American countries.

Indeed, fears recently arose over the possible collapse of several banks because of rules forcing them to sell $5 billion of complex securities called structured notes. Banks bought the notes last year at values tied to high black-market rates of the dollar, exposing some of them to huge losses after the local currency, the bolívar, strengthened this year.

Faced with a possible banking crisis, Mr. Chávez recently named as finance minister Alí Rodríguez Araque, who had won the grudging respect of some members of Venezuela’s business establishment after serving as the country’s representative to OPEC.

Mr. Rodríguez quietly sought advice from the I.M.F. and from the World Bank, multilateral institutions previously shunned or threatened with expulsion by Mr. Chávez. In recent weeks, banking executives and financial analysts here said, the finance ministry had asked troubled banks to individually negotiate ways out of the crisis.

But nationalizing Banco de Venezuela could cause those plans to unravel. Smaller banks might be hesitant to take difficult steps to strengthen themselves financially if they thought they would be nationalized anyway.

Soaring oil revenues give Mr. Chávez a cushion to carry out the nationalizations, with oil revenues up 70 percent in the first quarter to $20.5 billion. But demands from some sectors for a greater share of the revenues have also intensified, as seen in Mr. Chávez’s decision last month to raise salaries for the armed forces by 30 percent.

Such increases barely offset inflation, the highest in Latin America at 32 percent; food-price inflation has soared even higher, reaching 52 percent.

 

A monk at the Abu Fana Monastery wore a neck brace this week after a violent clash at the monastery in May. More Photos

CAIRO — A monastery was ransacked in January. In May, monks there were kidnapped, whipped and beaten and ordered to spit on the cross. Christian-owned jewelry stores were robbed over the summer. The rash of violence was so bad that one prominent Egyptian writer worried it had become “open season” on the nation’s Christians.

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Does Egypt face a sectarian problem?

Not according to its security officials, who insist that each dispute represents a “singular incident” tied to something other than faith. In the case of the monastery and the monks, officials said the conflict was essentially a land dispute between the church and local residents.

“Every incident has to be seen within its proper framework; you study an incident as an incident,” said an Interior Ministry spokesman who grew furious at the suggestion that Egyptians were in conflict because of their differing faiths. It is customary for security officials not to have their names revealed publicly.

“An incident is an incident, and a crime is a crime,” he said.

But the Egyptian security apparatus is increasingly alone in its insistence.

As more and more conflicts pile up and as the tensions of daily life increase, many people in Egypt and around the region said the problem of sectarian clashes had become more urgent. They said that ordinary conflicts had become more bitterly sectarian as religious identity had become more prominent among Muslims and Christians alike.

“It is as if there is a struggle — each against the other — and it creates a sectarian atmosphere,” said Gamal Assaad, a former member of Parliament who is a Coptic intellectual and a writer. “This tense atmosphere makes people ready to explode at any point if they are subjected to any amount of instigation or incitement.”

Egypt is the most populous Arab country, with about 80 million people. About 10 percent are Coptic Christian.

For most of Egypt’s Coptics, the major flare-ups — the attack on the Abu Fana Monastery or riots in 2005 in Alexandria — are faraway episodes that serve only to confirm a growing alienation from larger society. For most, the tension is more personal, a fear that a son or daughter will fall in love with a Muslim or of being derided as “coftes,” which means “fifth column.”

“We keep to ourselves,” said Kamel Nadi, 24, a Coptic who runs a small shop in the Shubra neighborhood of Cairo. “Muslims can’t say it, but it’s clear they don’t accept us. Here no one can speak the truth on this issue, so everybody’s feelings are kept inside.”

Christian Arabs have increasingly complained of being marginalized in the Middle East, with large numbers leaving over the decades. Now it appears that pressure on these communities is spiking, whether in Iraq, Syria, Lebanon, Jordan or the West Bank. In each, Christians speak of specific national behavior that has made them feel less welcome. While governments are generally regarded as more accommodating than they used to be, the overall environment is seen as less hospitable.

“Yes, we are feeling marginalized,” said Dr. Audeh Quawas, a surgeon in Amman, Jordan, who serves on the central committee of the World Council of Churches, a Geneva-based group. He rattled off a list of grievances, from the refusal of the state to acknowledge Easter as a national holiday to the insistence that Christians abide by Islamic law regarding inheritance.

For Egypt, sectarian tensions are complicated because they are connected to many other challenges burdening the nation, including crushing inflation and high unemployment among the young.

Many Egyptians around Cairo and in the south said that conflicts often arose over everyday matters — a dispute between farmers, an argument between students — but that once sparked, they deteriorated into sectarian name-calling, sometimes worse. That is partly because religious identity is paramount now, more important than a common citizenship, Mr. Assaad said.

“When something happens, it always comes back to Muslim and Christian,” said Tharwat Taki Faris, 45, a subsistence farmer in Mansafees, a village of about 33,000 people five hours south of Cairo.

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The village is poor, its unpaved and uneven roads filled with barefoot children in tattered clothing. There are two churches, each guarded by men with shotguns. There are also two mosques, where security men are posted outside on Fridays, just in case the faithful become overwrought during prayer, people here said.

It was midday, and villagers back from working their small plots of land began to gather to discuss relations with their Muslim neighbors. Any conflict between Muslim and Christian is a “singular incident,” they all said, using the same phrase. Villagers said that the government was adamant about keeping things “singular,” so whenever a Muslim and a Christian had a problem, they knew to go to the police before the matter escalated.

“If someone can’t resolve it, they go to the police station,” said John Riyad, 23. “Trust me, the police will make him resolve it.”

The crowd quickly swelled as men and women and children joined the conversation, which almost imperceptibly began to shift toward grievances: There are no Christian officers in the police force. The villagers cannot get permission to build another church. There are no high-ranking Christian officials in their governate. And of course, if their daughters married Muslims, they would kill them.

Then, just as suddenly, the crowd thinned. The reason: state security was on the way. A village informant had already reported the conversation.

“The police know you are here now,” said Mr. Taki Faris, before he, too, made himself scarce. “They are very anxious these days.”

Egypt is an authoritarian state held in line by a vast internal security force, about twice the size of the army. Certain topics are out of bounds. People know it is taboo to say openly that a sectarian problem exists. So they are cautious.

“We feel pressure, maybe not all the time, but we do,” said Ashraf Halim, 45, a grocery store owner in the Shubra neighborhood in Cairo. “We have liberty of speech, and religion, but it’s as if somebody was telling us at the same time, ‘Don’t speak and don’t practice your religion.’ ”

Mr. Halim’s grocery is next to a hair salon with the word “Allah” atop the storefront in large Arabic letters. He responds in his own small way, with a picture of St. George on his dairy cooler.

“Me, I try to keep a certain distance from Muslims,” said Mr. Halim. “We have simple relations: I give you this, you give me this. That’s it. They don’t want more than that, either.”

The underlying tension in Egypt flares periodically around the country. There were riots when word spread of a Coptic play supposedly denigrating the Prophet Muhammad and again over plans to expand a church. The state treated each case as a security problem.

But the violence at the ancient Abu Fana Monastery in May elevated events to a new level. In a follow-up report issued last month, the National Council for Human Rights described the atmosphere in Egypt as an “overcharged sectarian environment” and chided the state, saying it “turns a blind eye to such incidents” and was “only content to send security forces after clashes catch fire.”

Frustrated by the official posture of denial, a small group of Egyptian bloggers decided in January 2007 to try to bring Muslims and Christians together to talk. The group, which calls itself Together Before God, began with about 20 members of both faiths.

They posted an Internet survey to gauge Muslims’ and Christians’ ideas about each other and received about 5,000 responses. Two-thirds were from Muslims, the rest from Christians.

The survey showed profound misunderstanding on both sides, said Sherif Abdel Aziz, 36, a co-founder of the group. Some Muslims declared that Coptic priests wore black to mourn the Arab invasion of Egypt in the seventh century. Some Christians believed that the Koran ordered Muslims to kill all Christians.

Did the group discover a sectarian problem? Absolutely, and it was compounded by the lack of frank public discussion, Mr. Abdel Aziz said.

“The religious discourse has to change from both sides because it incites hatred, even if it does so indirectly, increasing fanaticism from both sides,” Mr. Abdel Aziz said.

During meetings in Washington this week with Pakistan’s prime minister, Yousaf Raza Gilani, senior Bush administration officials pressed their Pakistani counterparts to assert control over Inter-Services Intelligence, or ISI, the American officials said. The pressure comes as relations between India and Pakistan deteriorate following reports of ISI involvement in the recent bombing of the Indian Embassy in Kabul, Afghanistan.

The American pressure reflects heightened concerns at the State Department, Pentagon and Central Intelligence Agency that operatives in the ISI, who have long been believed to have close ties to Pakistani militants, have become bolder and more open in their support for militant Islamist organizations.

The New York Times reported this week that American intelligence agencies had said they have evidence that members of the ISI helped plan the deadly July 7 bombing of India’s embassy in Kabul.

In an interview on Friday, Pakistan’s ambassador to the United States, Husain Haqqani, said that American authorities have yet to show Pakistani officials specific evidence to support that conclusion.

“If any evidence were to be presented against any individual in Pakistan, or against the interest of Pakistan’s neighbors, then the government would certainly act on that evidence,” he said.

Mr. Haqqani hinted, however, that the civilian government would investigate any ISI officers who might be in league with militants, and laid blame on President Pervez Musharraf, who was firmly in power until elections earlier this year.

“Several outstanding problems in the relationship between the United States and Pakistan that the elected government inherited from the past are currently being resolved,” Mr. Haqqani said. “These include issues of trust between our two intelligence services.”

But bringing the ISI under civilian authority is easier said than done, as Pakistan’s new government found out last week. On Saturday night, while Mr. Gilani was en route to Washington, his government announced that the ISI would report to the country’s Interior Ministry.

One day later, after objections from inside Pakistan’s security apparatus, the government issued a clarification, saying that it had been “misinterpreted” and that the decree only “re-emphasizes more coordination” between the Interior Ministry and the ISI.

The Indian foreign secretary, Shiv Shankar Menon, said Friday that his country’s relationship with Pakistan had sunk to its lowest level since 2003, when the nuclear rivals stepped back from the brink of war and began peace talks.

“If you ask me to describe the state of the dialogue, it is in a place where it hasn’t been in the last four years,” Mr. Menon told journalists at the annual meeting of the South Asian Association for Regional Cooperation in Colombo, the capital of Sri Lanka.

“We face a situation where things have happened in the recent past which were unfortunate and which, quite frankly, have affected the future of the dialogue,” he said.

India has not cut off the peace talks, and Indian officials have said privately that the peace effort has been strained by political problems in Pakistan and the openings they may have created for hard-line forces.

“If you have this fluid situation, you have elements within the army, within the ISI, who have the opportunity to move forward with their own agenda, with respect to Afghanistan and India,” a senior Indian official said last week.

“The peace process is in limbo,” said the official, who spoke on condition of anonymity because he was not authorized to speak to the news media. “There is no direction. This is what has opened up the door to these elements.”

Prime Minister Manmohan Singh of India is scheduled to meet with Mr. Gilani on Saturday in Colombo.

At the State Department, Deputy Secretary of State John D. Negroponte has been in charge of the administration’s efforts to press Pakistan, administration officials said. Several officials noted that some officials in the Bush administration had begun to express a nostalgia for Mr. Musharraf, who has largely been pushed to the sidelines since his party lost elections in February.

While the State Department has publicly called for democratic elections and civilian rule in Pakistan, some officials said they believed that Mr. Musharraf had more authority to bring reform to the security services.

Another Bush administration official said Pakistan’s government had yet to assure the administration that it could control the ISI. “There are real questions about the organization’s loyalty,” the official said. “In the wake of political gridlock and a lack of a clear political direction, some elements of the ISI have started to exercise certain prerogatives.”

The officials spoke on condition of anonymity under normal diplomatic rules.

But some experts said the Bush administration should be more patient in allowing the new Pakistani government to assert its authority after years of military rule in Pakistan.

“In general, this administration at its upper reaches has been cool to the elected government from the start,” said Teresita Schaffer, a Pakistan expert at the Center for Strategic and International Studies in Washington. “They like to look at Musharraf as a factor for stability.”

A senior Pakistani official sharply disputed that Mr. Musharraf had been more effective at exerting control over the ISI. “It’s not disarray in the civilian government that has brought a lot of this to light,” the senior official said. “It’s the fact that the change of government has brought out to the open a lot that was kept secret before.”

Several foreign policy experts noted that there was nothing new in the ISI’s close ties to militant Islamist groups. “People tend to forget the frustrations that were there when Musharraf was in place,” said Daniel Markey, a former South Asia expert at the State Department. “The civilians are a mess right now, and the government is in a state of flux. When there’s flux, individuals in the ISI revert to form.”