Reality in Sarajevo drives people to believe in illusions: Strolling casually under shellfire is normal in the Bosnian capital. Robert Fisk reports on everyday life in the dying city

JUST before agreement was reached a few days ago to allow gas and electricity supplies back into Sarajevo, the Serbian radio station at Pale was taunting the besieged citizens with a vicious joke. What, an announcer repeatedly asked, was the difference between Auschwitz and Sarajevo? The answer, to the horror of the city's tiny but resilient Jewish community, was that Sarajevo had no gas.

Perhaps the horrors of Bosnia have made such viciousness inevitable, but it was a measure of the war's moral corruption, to which the people of Sarajevo have long grown accustomed. When Sanida Gusic returned from the black market to her house in Logavina Street this week, she had managed to buy just one small tin of corned beef for herself, her husband Shafiq and eight-year old daughter Emel. A bunch of carrots or a bag of apples now costs pounds 4.50, a packet of coffee pounds 30. Lack of vitamins is having its effect: Sanida's hair is falling out; Emel is bony, with circles under her eyes.

'We are surviving on the money we saved to build a new house - now we are spending everything we ever earned just to live,' Sanida said as Emel held a paintbrush in her thin hand and executed a picture of a small house with smoke curling from the chimney and a large butterfly hovering in the garden. 'We are grateful to the West for their humanitarian aid - yes, we are grateful - but the West will not save us and what can we do now that we have so little food? We used to drive to the sea near Dubrovnik every three months. I want the sea and the air. I want to take Emel away from here. I think we have no future life here. Do you know how I could leave? Is it possible to get a visa to England?'

Sanida is a university graduate with near-fluent English - her father is a professor who speaks English, German, Italian, Arabic and Farsi - and before the siege locked her into the prison of Sarajevo, she ran a travel agency. Shafiq is an economist, who now spends three days a week at the front line.

The UN was the first target of Sarajevo's anger, a humanitarian army that could not stop the shells and then failed even to bring in enough food for the city's people. Journalists are probably next. Sarajevans thought our reports would force the world to act. Now stones are thrown at reporters in the graveyards. And why not, when we cruise the streets in armoured limousines, clad in pounds 600, 10kg flak jackets, interviewing women who have nothing more than summer dresses to protect them from shrapnel? Gunmen are starting to steal our armour at roadblocks, as well they might.

Perhaps hopelessness produces illusion. Almost everyone in Sarajevo wants to travel, to dream of exotic holidays. I met a woman last week who has pasted pictures of Caribbean beaches on her walls.

Or is illusion a kind of collective suicide-wish deep within the subconscious of Sarajevo's citizens? That they walk under shellfire has become almost a cliche; yet television fails to convey this extraordinary phenomenon. Even as a witness, you are forced to examine your own senses. Where else on earth can you find young men and women in T-shirts and jeans walking - actually strolling in a mildly indifferent way - as shells explode in the streets around them? In other cities under siege - in west Beirut in 1982, for example - families move to their basements. But not in Sarajevo. As a French television cameraman remarked, the men and women walking under shellfire look so normal that any viewer would imagine the gunfire had been added to the soundtrack.

So it is that the people are cut down. Six killed by a shell in a bread queue, seven children playing football, 12 men and women torn to pieces as they queued for water. 'I will tell you this,' an old woman lamented as she struggled vainly to obtain water from a mobbed tanker at the Kosevo hospital. 'Under Tito we had some order and some independence and a life to lead.' She was a Sarajevo Serb, but who could dispute what she said? Not for artistic purposes are portraits of Josip Broz, hero of the Great Partisan War, still hanging in shops and offices across Sarajevo. Like the two smashed railway carriages standing for more than a year outside Sarajevo station with their windows shattered and their doors honeycombed with bullets, those portraits are part of the frozen past, a memory of other times.

Like the man or woman who laid a cluster of branches and carnations at the old Partisan war memorial in Marshal Tito Street last weekend, the leaves and petals withering beneath the still unvandalised dedication to the 'Serbs, Muslims and Croats' who fought 'the evils of fascism' between 1941 and 1945.

An elderly Muslim and his wife crossed the Miljacka river on a wrecked bridge this week, walking along a single narrow metal girder to the northern bank, holding in their hands plastic containers of contaminated well water. 'How do you think we feel?' the woman snapped at me when I asked how life was treating them. 'What life is this? I am Jewish and I was here during the Second World War. This is worse.'