The modern and ancient merge in timeless Hanoi

Just after dawn around the perimeter of jewel-like Hoan Kiem Lake in the city center, hundreds of citizens gather daily in orderly clusters to tone their bodies and spirits for the future. Tai chi, touch-the-toes or Taoist meditation — whatever works.

Some of them stretch their limbs beneath a glitzy new video billboard that counts the days until 10-10-10 — Oct. 10, 2010 — when the city will celebrate its 1,000th birthday. Others choose the entryway to Ngoc Son pagoda, which dates to "time immemorial," according to a plaque. After their session, a few will drift to the Old Quarter, perhaps to a job at a Wi-Fi café or to join tourists in placing offerings of candy and beer at the ancient White Horse temple.

Time, timing, timelessness — all are heightened in Hanoi at this moment in its history. The steady pulse of the video calendar, the boom-boxed beats of the exercise soundtracks and the incessant putt-putt of the motorbiking hordes flowing past new luxury hotels and construction sites signal that an ages-old culture and a young and recently robust capitalist economy are marching toward modernity.

But elsewhere in this city of 3.1 million, which functions as Vietnam's cultural center and is the seat of the cautious communist government, time creeps along or gets stuck or appears to be weirdly warped. Strange and sometimes terrible reminders of a beleaguered, war-torn past linger here amid oases of serene Red River Delta beauty. And therein lies the attraction.

"Hanoi is so beguiling because it is a city of contrasts," says Ngoc Huu, 90, one of the country's best-known writers and cultural historians. "It is interesting to follow its mutation from the old into the new."

That evolution is increasingly drawing the attention of the outside world. Like the rest of Vietnam, Hanoi is enjoying an international tourism boom and the benefits of an economy that has grown by 8% for three straight years. The city drew 1.3 million foreigners last year, an increase of 13% from 2006, and a recent government study predicts the 10-10-10 festivities (details are still under wraps) will bring in 2 million international visitors and $1.7 billion in tourism revenue.

Recent double-digit inflation may temper some of the building plans, which so far include the construction of five more luxury hotels, numerous monuments and a high-end shopping mall. But the momentum is formidable, and astonishing, given that the country had no tourism and was on the brink of famine in the early 1980s before economic reforms and the normalization of relations with the United States in 1995 sparked the current growth.

Ho Chi Minh City and some of coastal resort areas already have been transformed; Hanoi is poised to follow, though in a different way and at a slower pace.

"Ten years from now, everything will be completely new," says Christian Pirodon, the general manager of the just-opened InterContinental Hanoi Westlake, a chic waterside outpost that just made Condé Nast Traveler's annual Hot List. "The willpower of the people here is so strong, what they want to achieve and where they want to go."

Such bullish forecasts are increasingly common within the hospitality industry, but they also alarm those who believe that Hanoi's most important role is to shape and preserve the national identity.

"To anyone who visits here, I always say you need to come to the north to see what Vietnam is all about," says Swiss-born Kurt Walter, general manager of The Press Club restaurant. "Now is the time to visit if you want to see the way it used to be."

Hanoi reveals itself through the things it chooses to preserve from those 1,000 years. Foremost is the yellowing, eerie-looking body of Ho Chi Minh, preserved in a glass sarcophagus inside a stately mausoleum guarded by stern soldiers. Beloved "Uncle Ho," who headed the communist government until his death in 1969, enjoys holier-than-Elvis status, and every year thousands of pilgrims visit the sprawling complex that houses the mausoleum, his former stilt-house residence, a museum and the presidential palace.

Equally evocative for Americans are the remnants of the Vietnam War, here called the American War. Hoa Lo Prison, built by the French in 1896 and later nicknamed the Hanoi Hilton when it housed American prisoners of war, was mostly demolished to make way for two residential high-rises. But a small area is preserved as a gloomy museum where one of the "highlights" is a display of Navy pilot John McCain's parachute and flight suit, worn when he was captured in 1967 after his plane was shot down and crashed into Truc Bach Lake. Thoughtfully, the plaque has been updated to reflect the now-senator's 2008 presidential bid.

A few blocks away, nearly hidden behind some houses in a non-descript neighborhood, is an even more bizarre memorial: an abstract white sculpture and a chunk of the wreckage of a B-52 bomber, arising from the middle of tiny Huu Tiep Lake. Reminders of the 100 years of hated French colonial rule that began in the mid-19th century live on in the grand Parisian-style boulevards and Hanoi Opera house, in the lavish cuisine of restaurants such as La Verticale and Le Beaulieu, and most notably at the posh Sofitel Metropole Hotel. Built in 1901 as one of Asia's most luxurious lodgings, it became a favorite of writers and diplomats before falling on hard times. Now, thanks to recent restorations, it's possible to sit by the pool under a bamboo canopy, sip a proper gin and tonic, and imagine that it's 1952 and Graham Greene is at the bar across the way.

Paradoxically, time seems most jumbled in the Old Quarter, whose chaotic maze of 13th-century streets still serves as a vital center for commerce, as well as dining and beer-drinking. Here it's common to see old women in conical straw hats balancing buckets of produce that hang from a wooden pole propped across their shoulders. Defiantly they claim their share of the narrow streets, walking determinedly against the onslaught of motorized traffic.

At Highway4, an Old Quarter gastropub that specializes in the traditional Chinese-influenced cuisine of northern Vietnam, modernization takes a curious form. The restaurant owners have phased out the moonshine infused with crow, bees and silkworms and replaced it with their own brand of elegant rice and fruit liqueurs that carry the slogan "the future of a tradition." (Gecko shots remain on the menu for now, however.)

Elsewhere, merchants squat in doorways, selling everything from live roosters to televisions, auto parts, dog meat, jewelry, Communist Party posters-turned-art-objects and soups made from fish or ducks gutted right on the sidewalk. Though it looks as if a tornado has taken the contents of a Wal-Mart and a Whole Foods and deposited them helter-skelter, the system has endured for more than 600 years.

Huu, who was born 90 years ago in the Old Quarter, says he doesn't know if he'll live long enough to take a nostalgic walk through the area on 10-10-10. His birth house was replaced long ago by a shop, anyway. But he's certain the spirit of the place will endure, if not on the new surface, at least at the ancient core.

"Hanoi remains Hanoi," he says. "Many, many places have changed, but the soul is there. You can feel it and see it, in the West Lake, the different monuments, the Red River. The soul is floating."