Quotes of the Day

When a group of men calling themselves Descendants of the Serbian Fighters From the 1912-20 Balkan Wars congregates for a ritual burning of the U.S. flag, most of the patrons of La Dolce Vita don't even bother to turn around. The morning sun is glorious on the terrace of the split-level bar overlooking the Ibar River, and the young men in black T-shirts are content to smoke their Marlboros and nurse their cokes, eyeing the more prosperous opposite bank of the river. They never cross the bridge, of course, because the Ibar marks the dividing line between Mitrovica's Serb north side, and its ethnic-Albanian south side — enclaves that have, for the past decade, been so separate that they might as well have been different countries. In fact, the reason the "Descendants" are burning Old Glory is ostensibly to protest Washington's support for the "fake state" of Kosovo.

But today's flag-burning is entirely for the benefit of a lone Serbian TV camera, and most of those nearby respond as if some annoying regular had just selected his favorite song on the jukebox for the umpteenth time. "It's all fake," mutters a local businessman under his breath.

Since the 1999 Kosovo war, the smoke-filled, vinyl seated bar and cafe on the ground floor of a crumbling apartment block has been a gathering place for the hard line Serbs who want to keep ethnic-Albanians out of their enclave. Its position on the front line has made La Dolce Vita the target of bomb attacks against Serbs by ethnic Albanians (nine people were injured here in 2006), and also a bully pulpit for anti-Western tirades.

It may still be the place to be seen in northern Mitrovica, but the riverside cafe no longer oozes a sense of imminent danger. It was tense, this past winter, when Kosovo declared independence from Serbia, and La Dolce Vita's regulars gathered in a tense silence, sipping slivovitz plum brandy, smoking, and waiting for the news from Belgrade. As the Serb capital was gripped by violent protests that included an attempt to torch the U.S. embassy, life became in Mitrovica became dangerous for Serbian and foreign journalists covering local demonstrations: Several had their cameras smashed; some were beaten. A Serb reporter who freelances for foreign news agencies had his upper teeth knocked out; he works his contacts more carefully now.

The biggest local eruption of violence came when U.N. police and NATO troops tried to evict Serbian judges from a U.N. courthouse. Local Serbs attacked NATO soldiers and U.N. police with grenades and rifles, and several hundred people were injured in the resulting melee — including one Ukrainian policeman in the U.N. force who died from shrapnel wounds. Despite the occasional rumor, still, of ethnic Albanian "terrorists" coming across the bridge to threaten Kosovo's Serb minority, the Serb "bridgewatchers" gathered at La Dolce Vita as an early warning system barely glance at the bridge any more.

It has been almost a decade since the Ibar became a de facto border between Mitrovica's Serbs and its ethnic-Albanians, and the two communities have effectively gone their separate ways. South of the river, a burgeoning population of ethnic Albanians is building one of the largest new towns in the newborn state — new kitchen appliance shops and cinemas are popping up to cater to the needs of a growing white-collar population. North of the river, Belgrade is doing its best to shore up the Serb community, doubling the salaries of civil servants who agree to stay on. "Belgrade will never abandon you!" Serb politicians told crowds during a recent election campaign, but many locals who can afford to have reportedly bought property outside of Kosovo. Northern Mitrovica is taking on the look of an unloved relic: crumbling socialist-era apartment blocks are festooned with laundry; rickety sidewalk kiosks display Yugoslav-era money and postcards of fugitive indicted war criminals Ratko Mladic and Radovan Karadzic. Vladimir Putin stickers are a hot seller.

The local hardliners' reliance on Belgrade could backfire, though: The power of hard-line Serb nationalists in the Serb capital has begun to ebb. National elections in early May were won by pro-Western moderates, who may begin to withdraw support from hardliners in the town. At least, that is what Western diplomats who want to unite Kosovo and end the stand-off in Mitrovica are hoping for.

Oliver Ivanovic, a former bridgewatcher who has since become a leading voice for moderate Serbs, is optimistic. "We are going to enter a more peaceful period," he told TIME. "It used to be a curse to say you were not obeying orders from Belgrade. But not any more." As he spoke, a NATO soldier on the far side of the river raised his binoculars and leveled them on the café. The soldier's view would have taken in a group of ex-bridgewatchers lounging around the cafe, but also three young women in tight jeans and moonshaped dark glasses perched on stools, taking the sun. An imperturbable waiter, who has seen harder times, brought chilled glasses of freshly squeezed orange juice. Even in this reliably bitter corner of the Balkans, life may be getting sweeter.

• Andrew Purvis