On a sweltering morning in mid-July, several hundred Athenians gathered in the hope of defeating an old stereotype. The Athens tram—shut down in 1960 by a government that thought mass transit was obsolete—was being relaunched to help reduce gridlock at the 2004 Summer Olympics. With the first tram of the new era due to arrive at Syntagma Square at 10 a.m., people spontaneously assembled on the platform to celebrate. "Greeks love a party," explained Maikl Tzamaloukas, 78, before launching into a popular song from his youth—"Go, go/ Get the last train!"—and dancing away down the platform.

By 10:45, Tzamaloukas had stopped dancing. The absence of the tram had turned into a taunt. "We are very sensitive at the moment," said Evangelos Stathatos, a teacher. "It's this Olympics business." Stathatos was speaking not of the record $7.2 billion that Greece is pouring into the Games nor of the frantic sprint to modernize Athens but of something more personal and painful: the worldwide presumption that the reputedly party-loving, responsibility-shirking Greeks are about to screw up one of humanity's more pleasant diversions. "The world believes that Athens is not ready, that we do not know how to do things right," he said. Stathatos peered down the empty track, then smiled awkwardly. "I hope the world is wrong."

It is. Sort of. No Olympic city, ancient or modern, is ever quite ready for such a huge spectacle, especially one that is now burdened by the baggage of global terrorism. Montreal played host to the 1976 Games with an unfinished Olympic stadium; the Atlanta Games never solved their traffic and technology woes. Even Sydney, lauded as the paragon Olympics just four years ago, had myriad preparation problems—not the least of them weak ticket sales—that were soon lost in the euphoria of the competition and the welcoming atmosphere. For all host cities, the first scorekeeping of the Games is how much remains undone before the sporting events commence. And, yes, Athens seems to have lapped the field.

Yet the Games will go on, and even if the promise of international unity through ferocious competition seems a bit quaint, the Games are at least a lock to mint fresh heroes who renew the Olympic tag line of "swifter, higher, stronger." The swimming pool doesn't have a roof, but it does have water, in which American Michael Phelps will try to rekindle memories of Mark Spitz. And unlike Montreal's unfinished structure, the Athens Olympic stadium does, as of June, have a roof, though seats are another issue. No matter: the track is down, and on Aug. 24, Moroccan Hicham El Guerrouj, perhaps the greatest middle-distance runner of all time, will chase the 1,500-m gold medal that keeps eluding him. In the nearby Indoor Hall, tiny Brazilian gymnast Daiane dos Santos will spring all 4-ft. 7-in. of herself into impossible flips and twists. At the end of 17 hypercovered days, TV watchers are likely to look back in amazement at the opening ceremonies and the 100-m dash, in amusement at speed walking and team handball, and move contentedly along to football season.

But for those making the trip, consider this a travel advisory: as the Aug. 13 torch lighting draws near, many venues still don't have pavement, signage or landscaping. The architect of the main stadium, Santiago Calatrava, insists he will need every minute until the opening ceremonies to finish his work. The $312 million central security system, designed to monitor everyone from pickpockets to al-Qaeda operatives, will not be fully operational. The nation's power grid is shaking like an old washing machine. Every class of laborer, from hotel employees to prostitutes, has threatened an Olympics-timed strike. Traffic barely moves.

If the situation sounds dire, it is actually much improved. In 1997, a year after watching parvenu Atlanta turn the Olympics into the world's largest county fair—lots of ads, lots of barbecue, no gravitas—the International Olympic Committee (I.O.C.) awarded the 2004 Games to Athens. The only reason was history. For 1,200 years—from the mid-700s B.C. to the end of the 4th century A.D.—tens of thousands of spectators from across the ancient world descended on the fields of Olympia to watch athletes compete. Wars were suspended, clothes were stripped off, and wine was devoured in what was the premodern equivalent of Woodstock, the Super Bowl and a suburban key party. In their 2004 bid, the Greeks promised not just to reference their history but also to re-create it. The shot-put event would be staged amid the ruins of ancient Olympia; the marathon course would retrace the doomed steps of Phidippides and end with a triumphant lap around Panathinaiko Stadium, site of the first modern Olympics in 1896. And those Games went swimmingly. There were 311 participating athletes (men only). Cost to the host: $542,300.

The I.O.C. was so captivated by Athens' past that it overlooked the city's present. It had no modern infrastructure, a serious domestic-terrorism problem, a limp economy and a labor force best described as mercurial. Indeed, three years after winning its bid for the Games, Athens had accomplished nothing in terms of venue construction, security or strategic planning. In April 2000, Juan Antonio Samaranch, then president of the I.O.C., described Athens as the worst organizational crisis in his 20-year career.

To save itself from historic ignominy, Athens turned to a hurricane of a personality known as Gianna Angelopoulos-Daskalaki. Although she had headed the successful bid committee, she had been left off the inappropriately named organizing committee. So she took it over. A Harvard lecturer and the first woman to lead an Olympic organizing committee, Angelopoulos-Daskalaki exudes so much power in such expensive skirts that she appears to have leaped fully formed from the imagination of Danielle Steel. Using her political clout as a former member of the Greek Parliament, her commercial savvy as the wife of a shipping tycoon and an impeccable instinct for knowing when to scare or seduce her adversaries, she somehow persuaded the government, which oversees all public works and Olympic construction in Greece, to begin a desperate game of catch-up on 138 Olympics-related infrastructure projects. "It was like running the marathon," she recalls, "at a sprinter's pace."

Given where Athens started, the accomplishments are startling. There's an efficient new international airport with a 20-mile suburban railway link, a new subway system that carries 530,000 passengers into central Athens daily, 130 miles of new and upgraded roads, and the restored tram that connects the city to the sea. President Costis Stephanopoulos now boasts of the "Greek way" of last-minute heroics, while the head of the Greek Orthodox Church, Archbishop Christodoulos, announced in June, "This is a—should I say it?—a Greek screwup which is inherent in our character. But in some miraculous way, it produces good results." Still, not everyone is impressed. "They've done a lot," says an I.O.C. executive. "If they were hosting the Olympics in 2008, I'd be very encouraged."

Although many of the remaining loose ends are cosmetic, there is an escalating roster of what an Olympic security consultant calls "holy s___!" problems. Even with gleaming mass-transit facilities, traffic experts recently clocked the average speed on 20 major Athens roads at 6 m.p.h., rendering emergency-service vehicles essentially useless. (Not that it will matter if ambulance drivers make good on their strike plans.) Two recent blackouts have stumped city engineers. And while members of Greece's notorious anticapitalist November 17 terrorist group were jailed last year for committing 19 murders over an 18-year period, small terrorist bombs still detonate in Athens with astonishing regularity.

Those issues have lately tarnished Athens' status as a cultural capital awash in history—the Romans were tourists here. Athens is a captivating, sophisticated city with swank shopping districts, colorful neighborhood squares known as plateies and lots of convivial sidewalk cafes, or kafeneia. Stretching from the deep blue waters of the Saronic Gulf to the rocky slopes of Mount Hymmetus, Athens is a lively jumble of modernity mixed amiably with the majestic remnants of this city's glorious past, from the elegant Parthenon, which keeps watch over the city, to the soaring columns of the Temple of Zeus in the city center. Wherever you turn, history blinks back. Even in the spanking-new metro system, ancient ruins found in some stations during construction are encased in glass.

The Greeks are desperate to change their national can't-do image by throwing a first-class Games. But they are physically, spiritually and monetarily tapped out from having packed all their Olympic preparations and a century of urban renewal into four dizzying years. "Everything we have done here is beyond any human imagination," said Public Order Minister George Voulgarakis in early July. "It is well known we really spent more than we could afford." Greece is one of the smallest countries to play host to the Summer Games, and the I.O.C., an organization normally allergic to accepting blame, has conceded that handing the prize to a nation of 11 million people who have an average annual income of $11,000 was a mistake. In a recent interview with a Belgian newspaper, I.O.C. president Jacques Rogge said future Olympic sites would "already have a maximum of infrastructure in place and a minimum of virtual plans."

All officials can do now is try to minimize the damage. There's no time to put a roof on the pool or relocate the rowing venue that sits on waters so buffeted by gusts that the area is studded by windmills, but cleanup crews are removing litter from public squares, the city's thriving population of stray dogs is being tagged, and traffic restrictions have been enacted to ensure that at least the competitors will be able to get to the events. If it's any comfort, the ancient Games weren't a picnic for spectators either. Tony Perrottet, author of The Naked Olympics, describes the facilities in Olympia as "reminiscent of a badly planned rock concert" and the city as dirty, impossible to navigate and disease ridden. Those who hiked the 210 miles from Athens had nowhere to sleep; the one hotel was cordoned off for VIPs.

Any temptation to reduce the deficiencies of Athens 2004 to charming historical echo stops cold when it comes to security. Even before Sept. 11, foreign governments were worried about Greece's lingering problems with domestic terrorism, its vast, unsecurable coastline and its proximity to the terrorist hubs of the Balkans, the Persian Gulf and North Africa. After Sept. 11, Greece openly asked for help with security and, in conjunction with its NATO partners, agreed on a cooperative strategy that is the obverse of the Powell doctrine. The plan, says a Western official, is to scare off terrorists with an overwhelming display of resources: "You want to put enough whistles and alarm bells on the house of the Olympics that if some [terrorist] looks at it, he's going to say it's too hard."

The deterrents in place are impressive. NATO will provide awacs aircraft to monitor Greek airspace. The U.S. Sixth Fleet will patrol the Mediterranean while the Turkish and Italian navies cruise the Aegean and Ionian seas. A 70,000-strong force of Greek police and military—nearly twice the number of troops deployed in Kosovo in 1999—will patrol the country. Security personnel will outnumber athletes 7 to 1. Publicly, the international community has gone out of its way to praise the Greeks for their willingness to accept advice (from Israelis on suicide bombers, the Czechs on chemical weapons, the Russians on Chechen rebels) and for ponying up $1.5 billion—15 times as much as Atlanta—in security costs.

Privately, there have been some serious dustups. Most prominent was the battle over who would actually protect the athletes. The U.S. and Israel, among other nations, insisted that their security forces be armed; the Greeks were offended by the implication that they couldn't be trusted to look after visitors and cited the Greek constitution, which forbids foreign personnel to carry weapons, as the final word on the matter. After months of wrangling, numerous sources say the U.S. and Greece agreed last week that only the Greeks will bear arms. It is a mutually beneficial lie that burnishes Greek pride, but in fact armed U.S. special-forces soldiers and an FBI hostage-rescue team will be riding shotgun on the U.S. squad. Nevertheless, for the first time in Olympic history, the I.O.C. has taken out an insurance policy, valued at $170 million, should the Games at any point be canceled because of terrorism.

So far, only one athlete is known to have backed out of Athens explicitly because of security concerns. U.S. rower Xeno Muller, a two-time Olympic medalist, was in his boat moments before the U.S. trials when he considered the risks and got out of the water. "I'm not against the Olympics," says Muller, who has three children. "All I know is that I'm slightly happier now that I'm not going. Actually, quite a bit happier." U.S. tourists seem to feel the same way. By most estimates, U.S. Olympic tourism is down 20% to 30%, and while some of that can be attributed to the weak dollar, nbc, which is hardly impoverished, has set up an alternative site for its traditional advertiser boondoggle. Fat cats can watch the Games from Bermuda.

For Americans, the Olympics provide a break between the political conventions and a brief chance to invest themselves in sports they usually don't care about. But in a nation with unmatched economic and athletic dominance, the Olympics are no longer a proving ground for U.S. national identity. There are no more miracles on ice. For Greeks, though, the Games were supposed to be both a glorious look back and a 21st century coming-out party. Instead, they have become a burden. "When we got the Games, almost everybody was enthusiastic and happy," says Nikos Dimou, a prominent Greek novelist and social critic. But Dimou says the fearsome cost and the shame of the admittedly necessary I.O.C. intervention have turned people off. "We stopped seeing the Olympics as 'our Games,'" he says.

The proof is at the box office. Organizers have sold only a bit more than one-third of the 5.3 million tickets available, even though many are priced well below those at the 2000 Sydney Olympics. They are counting on a typically Greek last-minute rush to fill the stands but admit it will take a miracle to engineer Olympic sellouts.

With the hurried preparations, the terrorism fears, Greek ambivalence and the ongoing drug scandal, the Olympic flame isn't burning too brightly. But these are still two of the better weeks in which to be a human being. The opening ceremonies may be cheesy —and you just know Yanni will be making an appearance—but when those 10,000 athletes from 202 countries, including Iraq and Afghanistan, march into the stadium in outfits that would be considered camp at the Tony Awards, the world will have a rare chance to see itself as it would like to be. And in the 16 days that follow, when those athletes achieve incredible things—and more often when they don't—we will also have a chance to indulge in a little global empathy. That alone is a reason to throw a party. Even if the tram never arrives.

• JOSH TYRANGIEL