BOOK REVIEW / Endless late nights in the ministry of sleep: The Palace of Dreams - Ismael Kadare, Tr. Barbara Bray: Harvill, pounds 7.99

OF ALL the faraway places of which we know nothing (and care less), hardly anywhere is farther than Albania. For the past few months it has, lurking behind the Balkan headlines, been almost front-page news; but only a few years ago it was still possible to hear Radio Tirana proclaiming in the night that brave little Albania, along with the great and friendly people of China, made up one-fifth of the world's population.

So it is tempting to approach the novels of Ismael Kadare, Albania's only internationally known writer (and a frequent tip for the Nobel prize), as if they were of merely geopolitical interest, or as if they might open some kind of window into a strange world. But apart from a few minarets and mosques, emblems of the Islamic life that is being savaged in nearby Bosnia, The Palace of Dreams includes few references to the life of the nation. This is hardly surprising. It was dreamt up in 1981, in Tirana, by a writer who was already in trouble for 'subjective treatment of historical events'. Fiction written in such conditions is obliged to be, at the very least, roundabout.

Kadare certainly seems to have worked hard to drain local colour out of the book: there is a careful, generalised flavour to the descriptions of the book's cold streets, bleak skies and empty windows. Everyday life, symbolised by a couple of brisk whiffs of 'tea and toast', is not allowed to interfere with the allegorical, or perhaps archetypal, version of a totalitarian nightmare.

The palace in question is a government department dedicated to the classification and analysis of its subjects' dreams. It is, quite literally, a ministry of the night, and it is a fearful, inspiring and memorable idea. Inevitably, and perhaps unfortunately, it makes us think of Kafka, but this might be just a quirk of alphabetical shelving. Although the book's hero, a young noble called Mark-Alem, is forever wandering in a daze through the incomprehensible corridors of a dumb bureaucracy, he is no Joseph K.

For one thing, when he wakes up from an uneasy sleep on the novel's first page, and finds he is about to go to work in the palace, nobody has made a mistake. Mark-Alem is the son of one of the empire's most prestigious and powerful families; what could be more natural for such a man than a job in one of its most prestigious and powerful ministries? That is how it should go, at least. In fact, Mark-Alem is frightened and bewildered by almost everything. Presumably, this is Kadare's way of indicating that the secrecy plague has infected everyone, even the top brass. But it is the book's one unconvincing feature that its hero - a man born to rule, a man about to have dinner with his relative, the vizier - conducts himself like a sleepy, incurious rustic.

Mark-Alem begins his new life by working in 'Selection', joining a roomful of inert clerks who sift through the dreams and pick out the ones that look interesting. After a while - a suspiciously short while - he is promoted to 'Interpretation', where a more senior roomful of inert clerks write explanatory notes. The function of the palace as a whole is to find, each week, a 'Master- Dream' - a story fateful enough to be placed before the sovereign. The theory is: everything that happens has probably been dreamt first, in some form. It is simple prudence on the state's part to intercept these prophetic utterances.

Simple prudence - or simple madness? The imposition of a mechanical framework on something as slippery and fragile as a dream - an Institute of Freudian Slips - is a rare and horrid idea. The novel narrates the workings of the machine calmly, then leaps into life when it steps outdoors. At one point Mark-Alem bumps into the messengers who bring dreams in from the farthest corners of the empire: 'The place was full of men, horses and wagons, some with their lights on, some with them off, all rushing to and fro in nightmarish confusion.' It is a striking scene: a futile expense of spirit in the service of an obscure idea. Frightening, too: the authors of the winning dreams, we learn, are invited into the palace's interrogation rooms. There's nothing more dangerous than a comatose subversive.

One dream that keeps landing on Mark-Alem's desk goes like this: 'A piece of waste land by a bridge; the sort of vacant lot where people throw rubbish. Amongst all the trash and dust and bits of lavatory, a curious musical instrument playing all by itself, except for a bull that seems to maddened by the sound and is standing by the bridge and bellowing . . .'

Mark-Alem is slow to figure it out, but to us it is obvious how this fragment will ricochet through the book. We have been told that Mark-Alem's surname ('Quprili') is Albanian for 'bridge'. We have been alerted to the bad blood that exists between this proud family and the sovereign, who bitterly resents the fact that the Quprili have their own medieval epic, which is usually accompanied by a curious instrument. It seems evident that this musical bull will be interpreted as a warning that the Quprili are maddened and bellowing, and must be stopped.

And so it proves. The story gathers itself up into a sudden nocturnal convulsion, involving troops, dead musicians and carriages that fly through the night. It's real - but Kadare surrounds it so cleverly with shadows and evasions that it feels like a dream. The life of the palace and the life beyond its walls merge, stir, and propel Mark-Alem to the top of the greasy palace pole. A book that at first seems oddly remote - this might be because it has come into English via French, so is linguistically twice-removed - ends up playing a loud and original tune. It might not have the ferocious witty crackle we find in Kafka, but then, what does? Kadare's palace is still such stuff as literature is made on. The most amazing thing is that he was able to stay on in Tirana for almost a decade after it was published. Someone in the Palace of Dreams must have fallen asleep.