By Caroline Hawley in Libya

For seven years, Libyans wanting to enter or leave the country have had to do so by road - now they can fly. Several international airlines have resumed flights to Tripoli and the national carrier is back in the skies.

Colonel Gaddafi's new policy of co-operating with the West - and the rewards it has brought - are playing well with his people.

"We want to end our problems with all other countries," said mechanical engineer Sadeq Saoud, as he sat in the offices of the Libyan Airline, making preparations to fly to Saudi Arabia.

"We want to make good relations with all the people in the world."

The United States still maintains its own embargo on Tripoli. But a thaw is well underway in Libya's relations with Europe. European businessmen are now beating a trail to Libya, hoping for new contracts - particularly in the country's vast oil industry.

Tourist attractions

Libya also hopes now to attract another kind of visitor.

A poster in the Wahat hotel in central Tripoli invites potential tourists to visit the "Great Libyan Jamahiriya" or "Republic of the Masses."

Libya's ban on alcohol may not appeal to all tastes, but the country does seem to have a certain post-isolation chic as a holiday destination.

"Libya has a lot of beautiful sights - Roman ruins and Greek sites and, of course, the desert," says Rasem Bakir, manager of a Tripoli-based tour company.

Tourists hoping for a sighting of the Libyan leader - one of the world's most eccentric rulers - are not disappointed. Portraits adorn the streets: Gaddafi gazing out from in front of a picture of a Libyan plane; Gaddafi in a hard-hat outside an oil depot; but mostly now, Gaddafi in front of a map of Africa.

From 'mischief-maker' to peace broker

In another shift of foreign policy, Colonel Gaddafi has turned his back on the Arab world and switched allegiances to Africa, where he has now become a would-be peacemaker - after what one diplomat refers to as Libya's "mischief-making" of the past.

At a recent celebration of Libya's "historic" friendship with its southern neighbour Chad, Col Gaddafi pledged to do all he could to persuade any African who took up arms against a fellow African to lay them down.

But as Libya revamps its foreign policy, and opens up to foreign business, there is little indication of any opening-up at home.

"It's still a very secretive society," according to one diplomat who says nonetheless that there is a "certain amount of hero worship" of Col Gaddafi.

Restrictive society

Minders still accompany visiting foreign journalists, and the media is all government-controlled, making it hard to gauge the public mood. There is no functioning civil society.

"There is no scope for opposition activities in Libya at all," says a researcher for Amnesty International in London. "Opposition is actually illegal."

An Islamic insurgency in the mountains in the east of the country in 1996 was forcefully crushed, but diplomats say there are still stories of arms caches being discovered, and undercurrents of Islamic dissent. "There is a lot of suppressed opposition," said one businessman who travels to Libya regularly.

"But you would have to be either very brave or foolhardy to do anything."

Modernisation

Among foreigners, too, views of the Libyan leader are mixed. "I take my hat off to him," said one Italian who has lived in Libya for 25 years.

"He has built a modern state from the sand before my eyes. He's filled the country with free schools and hospitals, and linked tiny villages in the desert with modern communications.

"He may be Machiavellian, but he's not the monster people make him out to be."

Free medical care and education, and subsidies on basic foodstuffs, may have helped mitigate opposition to Gaddafi's rule.

The seven-year embargo also took more of a psychological than an economic toll on Libya. The Yves Saint-Laurent counter of the perfume store on Baladia Street remained stocked, as goods were shipped in by sea.

The suspension of sanctions has, of course, made a difference.

"It's much easier to get materials and move staff now, and new shops are opening up" says Antonguilio Alborghetti, an executive of the Italian oil company Agip.

"But even before the suspension of sanctions, you didn't have the feeling of a country under embargo. In fact, it was quite comfortable living here."