April 29, 2007 -- Djalal Baba Khelil spread his arms wide, pointing out the intricate brickwork of the Ottoman-era hammam (public baths) that he and fellow young residents of Algeria's western port city of Oran have spent four painstaking years restoring.

"The French were true colonialists. They built their structures on top of ours. But now we are recovering our history," said the 23-year-old engineer, proudly showing off the grand bath, over which the French authorities that divided and ruled Algeria for 132 years had built a causeway for their carriages.

In a country where more than a million people died in the fight that freed them of French rule in 1962, and more than 150,000 were slaughtered in a brutal, decade-long terrorist campaign by Islamist extremists in the 1990s, shifting rubble and restoring old buildings is not simply an exercise in archaeology. It is also an effort to educate and reconcile future generations of Algerians with their tortured past, in the hope they may steer the country out of its still-troubled present.

"Our young people do not receive an Algerian education. In school they learn about Arab history. On television they watch films made in the West. Politics is about ethnic Berbers. And religion has become political Islam," said Kamel Bereksi, head of Santé Sidi El Houari, the non-governmental organisation that is working to restore heritage sites in Oran.

"We work in the poorest suburbs where the Islamists think they can have their way. We aim to give young people a sense of national pride, to ground them in this country so they can see a future in Algeria," he explained.

That need could hardly be more pressing. Earlier this month in the capital, Algiers, a suicide car bomber rammed his vehicle into the gates of the main government building, tearing the façade off the prime minister's office and destroying the public perception that an era most call simply "The Terrorism" was finally over.

Two other simultaneous suicide attacks - the first time Algiers has witnessed such a terrorist tactic - left a total of 33 people dead and wounded more than 160.

"I can't believe this is happening again," said a distraught Wahiba Sheboum, a young businesswoman from Algiers.

"These people have already ruined 10 years of my life and they stain all other Algerians with their terrorism, which has nothing to do with fighting for Islam."

In 1992, after elections that would have handed power to Islamists were annulled by the secular government, it was Algerian veterans of the Afghan war against Soviet occupation who formed the Armed Islamic Group - known by its French acronym, the GIA - and unleashed a terrorist campaign against civilian targets in the oil-rich north African country.

An amnesty offered to militants by President Abdelaziz Bouteflika when he took office in 1999 persuaded the GIA and most other extremists to lay down their arms in return for a pardon without prosecution.

But a splinter group, the Salafist Group for Preaching and Combat, or GSPC, refused, and late last year won the endorsement of al-Qaeda, who said that the group would attack France and Algeria's military-dominated government, which has been a key US ally in the post-9/11 war on terror.

Now, just as the foundations of Algeria's civil war were laid by veterans of foreign conflict, so the resurgence of Islamist violence appears driven by fighters from the region's current great battleground, Iraq. Authorities investigating the Algiers bombing have arrested 80 Algerian Islamists suspected of fighting in Iraq.

With a string of recent suicide attacks also hitting neighbouring Morocco's capital, Casablanca, intelligence agencies in Spain - which also has historical ties to Algeria - last week warned that north African al-Qaeda-linked militants may be planning attacks in Europe, possibly to coincide with the French presidential run-off and Spain's local elections next month.

For those in Algeria who opposed the amnesty, the resurgence of Islamist militancy was a tragedy waiting to happen. "This is what impunity gets you," said Abdeslem Abdelhak, a former journalist whose newspaper was shut down in 2004 after criticising President Bouteflika's reconciliation policies.

"The terrorists should have been judged by a court of law, not pardoned. They were given liberty and so their sons were encouraged to continue, believing they fight for a just cause."

The militant cause is what the GSPC would like Mohammed Mukhtari, and other young Oranis to follow. Aged 19, and with his father dead, Mohammed dropped out of school in search of work, a perfect target for extremists seeking to groom the young into militancy.

But then Mukhtari heard about a project to restore an old Turkish bath. Four years later, the young man is a qualified stonemason and working for more than just his salary.

"Now I have a job and have also learned a profession," he said. "I used to not know the difference between the old and the new. Working here I can give history back to the people. And perhaps by restoring this city we can begin to restore our country."