Greed, fear and shady deals struck in the back of a Toyota

In Abu Bakar Mansaray's big, pink palm it did not look much like a source of death and misery. The diamond glowed and shimmered, its light catching the glint in his eyes as he whispered his sales pitch.

In Abu Bakar Mansaray's big, pink palm it did not look much like a source of death and misery. The diamond glowed and shimmered, its light catching the glint in his eyes as he whispered his sales pitch.

"This is just the best sah just the best, from Kenema. I take a big, big risk just being here. It's worth $5,000 [£3,300] in Europe sah. I'll give it to you for $400. I need to move quickly," he said, holding up the gem in the cramped back of the Toyota parked at the Cape Sierra Hotel in Freetown.

"It's actually worth about half that in Europe," said Yusuf Habib the Lebanese dealer who had come to observe the supposed transaction as he eased himself out of the car. "But he's right about the risk. He will be in a lot of trouble if he gets caught. But there is a lot of greed with these people."

The stone Mr Mansaray, 21, was trying to sell was a "blood diamond", dug from the mines controlled by the rebel Revolutionary United Front and used to finance the country's savage civil war. Mr Mansaray, dapper in his Levi jeans and red Fila t-shirt, undoubtedly had links with the rebels, despite his denials. Freetown, firmly in government hands, was hardly a safe place for him.

But it is one of the perversities of Sierra Leone that diamonds, the very thing that fuels the strife, are traded across warring lines, their lucrative proceeds greasing palms and ensuring a smooth passage.

Kenema, where this stone came from, is an example of this co-existence. On either side of the town are the RUF and Kamajors, one of the government militias. But both sides have a tacit understanding allowing the mining and trading in diamonds to continue.

Mr Mansaray has been making his living as a "san san boy" or illicit miner. Mr Habib, in his late 40s with homes in Freetown, Antwerp and Long Island is at the other end of the spectrum. His widespread business interests include Kenema and Bo, another diamond centre, where the mainly Lebanese shops receive supplies from both sides of the war.

The bulk of the diamonds from rebel-held mines go to neighbouring countries, especially Liberia, whose leader, President Charles Taylor, sustains the RUF with arms and training in return.

The total output from Liberian mines is estimated to be between 100,000 to 150,000 carats a year. Yet between 1994 and 1998 it exported 6 million carats.In 1995 when the country was in ruins following its own bitter civil war with economic activity virtually non-existent it exported $500m worth of diamonds.

The Lome Accord brokered by Britain and the United States last year saw the rebel leader Foday Sankoh released from prison and made head of the Commission for the Management of Strategic Resources - in charge of diamonds - thus effectively confirming the RUF occupation of the mines.

Evidence of the kleptocracy that followed was found at Mr Sankoh's home in Freetown following his second arrest earlier this year. Just one set of documents, for a nine-month period, listed the acquisition of 786 carats of white diamonds and 887 carats of industrial diamonds. Ten per cent of the diamonds from Kono went to Mr Sankoh, 10 per cent to his deputy Sam "Mosquito" Bockarie, 30 per cent on buying weapons and the rest to Charles Taylor.