I thought a lot about the destructive power of hopelessness during the bleak winter of 2002. Hopelessness permeated the air; it fed on itself and it perpetuated itself. Old people shook their heads and said that Israel had never faced a more severe crisis in its history. The violence and the devastating economic situation were always there, impossible to ignore and totally consuming our emotional energy. Most people found it difficult to think of anything but terrorist attacks and unemployment.

When I complained to a friend that the amount of litter on the beach was a disgrace, and that something needed to be done, she sighed and said that I was right, but who had energy to think of such things?

The Situation (haMatzav) was the reason given for practically everything. Because of The Situation, the streets of Tel Aviv were dotted with empty shops and restaurants that had gone bankrupt. Because of The Situation, there were no jobs. Because of The Situation, even those who did have jobs were afraid to spend their money. Because of The Situation, border police who kept their fingers on the triggers of their weapons guarded the entrances to the shopping malls. Because of The Situation, my friend Ilan started making chicken instead of steaks when he invited me for Friday night dinner, and he stopped serving wine. He and his wife still had jobs, but they had decided to go an economy drive - because of The Situation.

And people were very, very jumpy. Once a security guard at the Dizengoff Center was searching my bag when my mobile phone rang. The guard instinctively leapt backward, his face a mask of shock and fear. "My God," he said in a heavy Russian accent, "I really thought it was a bomb."

Part Six of How Lisa Came to Israel is a story that takes place between January and May 2002. It was a time when everything went to shit - for me specifically and for Israel in general. Whenever I think of those five months, I think of the colour grey. It was an incredibly sad time. That winter we learned that things could always get worse - because they did. It was the time that hope died.

Like most people, I was in a state of constant emotional upheaval. It takes about two days to get over the anguish of a terrorist attack, but during the winter of 2002 the suicide bombers struck so frequently that there was never enough time to recover from one bombing before the next one occurred. So I was on a never-ending adrenalin high, perpetually and precariously balanced between the desire to laugh - because how can you not laugh when it doesn't seem possible for things to get worse, and yet they do, all the time? - and the need to cry. It was like having some weird bipolar disorder.

Mostly, my job at the diamond exchange made me want to cry. Yossi, the diamond dealer who hired me to be his English-language assistant, was a petty tyrant who seemed to enjoy making my life a hell. He was the kind of man who divided people into three categories: his family, to whom he was unstintingly loyal; people who could help him make money, to whom he was unfailingly ingratiating; and everyone else, who should serve him, swallow his abuse silently, and shut up. I, of course, fell into the latter category.

In retrospect I understand that I took that mind-numbing, underpaid, humiliating job because I'd become a mental hostage of The Situation. After three months of being told by every potential employer that they weren't hiring because of The Situation, and after listening for months as politicians, news analysts and television reporters repeated that Israel was in a free-fall crisis, I'd absorbed the atmosphere of desperation. And I couldn't transcend it. For all my education and experience, I genuinely didn't think I could do better, in that economic climate, than land a job as a secretary.

So when Yossi showed me the thick stack of resumes he?d received since advertising the position three days previously, and then told me I was hired, I felt as though I'd won a medal. I had a job! It was only after I got home that I realized the salary would barely cover my overdraft payments, my rent and my bills. I'd be working full time just to survive.

About a month after I started to work at the diamond exchange, I cracked. It was "one of those days," but with a uniquely Zeitgeist-y flavour. It started with me oversleeping and not having enough time to wait for the hot water to heat for a shower. And yes, given the choice between showering in cold water and not showering at all, I'll choose the cold shower - even if it's the middle of winter. My flat mate Eran, who worked in his father's diamond business and drove us both to work every morning, thought I was crazy.

When I got to the office, Yossi was busy preparing for a business trip to the United States. He was extra abusive that day - barking orders about packing up diamonds to send via Brinks and having me send endless faxes to his insurers in Belgium. He kept giving contradictory instructions, and then yelling that he'd never said any such thing. The lowest point was preparing and serving espressos for three leering Uzbeki diamond merchants. They wore gold chains that nestled in the thick black hair that sprouted where their open shirt collars formed a "V", and they didn't try very hard to make room for me to squeeze past them. I got yelled at for serving the coffee with plastic spoons.

Meanwhile, the television mounted on the wall was tuned to CNN, which was broadcasting live footage of a gun battle between IDF soldiers and Palestinian gunmen who had penetrated the Green Line into Israel. After the Uzbekis left, Yossi muted the volume and telephoned a diamond dealer in Belgium. He peered at the television over the tops of his gold-framed reading glasses and spoke into the phone in a mixture of German, Yiddish and Hebrew: Nu? Kommst Du aus Palestina? Vus? Ata mefached, ah? Ja, ani meveen. Du bist a chochem. (So? Are you coming to visit Palestina? What? You?re afraid, huh? Yeah, I understand. You're a wise man).

Shortly after my charming boss left for the airport, I was informed that the guy who owed me 1,000 shekels for writing his Web site content (it was a freelance job) had gone bankrupt and left the country. Then Yossi called me from his mobile and told me I?d have to stay late in order to wait for an important phone call from his factory in Belgium, which meant that I would miss my weekly free yoga class. I waited for two hours, but the call from Belgium never came.

Finally, I escaped from the office - but the police had set up roadblocks due to a terror alert, and traffic was barely moving. By the time my bus arrived, 45 minutes later, I could have walked home.

While walking the short distance from the bus stop to my apartment, I nearly got run over by a car that screamed into the intersection when I was crossing the street. The driver hit the brakes violently, leaned on her horn and made rude gestures indicating that I should move more quickly. Under normal circumstances, I would have laughed; at most, I might have made a rude gesture. But that night I went ballistic.

I stood in front of the silver Mitsubishi, blocking its path, and refused to move. I cursed at the driver, calling her a bitch and a whore, and I kicked the wheels of her car. She, in response, jumped out to confront me and nearly attacked me physically. We stood there in the middle of the intersection, shrieking at each other like a couple of fishwives. The traffic piled up and drivers leaned on their horns. All my pent-up rage came pouring out, and I seriously thought I was capable of physical violence at that moment.

When I got home, Eran and Ilanit were sprawled on the couches in the living room, hanging out with friends. The space heater was humming cozily, and a song by an Israeli group called"The Fools of Prophecy"was playing on the stereo. "Nobody is going to leave this place/So start to love/We?re a generation of love, not war/Arab, Palestinian, Jew, Argentinian/ It doesn't matter/We're all human beings."

I flopped down next to Ilanit, put my feet up on the table, took the joint that was passed my way, and told them about the incident with the car. I think I'm losing my mind, I said. They laughed at me, gently. They told me that I was just fine, and asked what I was going to cook for dinner.

More than a year after we'd all moved out of the apartment on Mazeh Street and gone our separate ways, Eran referred to the winter of 2002, when he, Ilanit and I lived together, as "that beautiful time." We all knew what he meant. While the bombs were exploding, the economy was crumbling and the whole country was convulsed in crisis, our apartment was a refuge. It was a place of remarkable harmony. We cooked and ate together, shared our problems and offered support, and we never missed an episode of Sex and the City. When there was a bombing, we sat around the television and mourned together as we watched the bodies being collected. We never argued over the dishes, we never complained about waking up in the morning to discover that one, two or all of us had had an overnight guest who was monopolizing the bathroom, and we always dealt with annoying issues by talking about them frankly and without drama, before they could develop into a source of tension. The apartment was our fortress, safe from the scary world outside its walls.

Yossi fired me two weeks before Passover. I wasn't surprised - ten weeks into the job, I'd stopped trying to hide how much I disliked him; and anyways I was a terrible secretary. But the timing was very inconvenient. I wouldn't receive my badly needed Passover bonus, and of course there was no chance of finding any kind of work during the holiday season. Yossi knew this, of course - and he knew that for this reason Israelis considered it kind of unethical to fire an employee right before a major holiday, like Passover or the Jewish New Year. But I guess the dislike was very mutual, and he wanted to punish me.

I had no idea how I would survive financially, but I didn't really care just then. Getting the sack was like being released from jail, and all I could feel was relief.

To celebrate my freedom, I went to sleep at Guy's apartment. Normally I avoided seeing my then-boyfriend on weeknights, because he worked from home and slept late. But I didn't need to get up early the following morning. I was free. Broke, but free.

I used to love waking up at Guy's place in the morning. He lived on the top floor of a building that was just a few steps from the beach; the sliding glass doors leading from his bedroom to the balcony faced the Mediterranean; I'd snuggle under the puffy down quilt while looking out at the pale blue post-sunrise sky, the water and the white sand. Sometimes I would see a few windsurfers, their black wetsuits silhouetted against their sails.

But that morning I woke up to the sound of helicopter blades beating through the morning quiet. I lay on my side, the quilt pulled up to my chin, and watched as three military helicopters flew along the coastline in the direction of Gaza. I felt Guy waking up behind me; he slid closer, hooked his chin over my shoulder, and we gazed out the window silently. After the helicopters disappeared from view we curled up together for a while, not wanting to leave the warm and illusory safety of the bed. Finally, Guy went to make coffee. I got up too, and turned on the computer to check a local news site. On the homepage there was a report that Israeli army helicopters had bombed a target in Gaza about 15 minutes after we saw them pass our window in Tel Aviv. I don't think that Guy and I even talked about that incident.

Recently I recounted the tale of the helicopters to Diana; she snorted and said that it was a "very left wing story." I didn't - and don't - see anything remotely political about it. For me that story is simply a vivid illustration of how pervasive the atmosphere of violence had become. And besides that, I didn't see the conflict as one nation pitted against the other; I saw it as a stage on which a couple of craven actors with far too much power were acting out a self-destructive and personal battle that had started in Beirut, in 1982. Neither of them was winning, and we were all paying the price. At the risk of sounding simplistic, I often wished I could take Sharon and Arafat, lock them in a room and tell them they couldn't come out until they'd worked out their differences.

But I lost even that objectivity during the horrible week of Passover 2002.

I celebrated the Seder with Chani and her family in Kfar Sava. They were religious, so they wouldn't turn on the television on holidays. By the time I got home it was past two o'clock in the morning. I went straight to bed, and didn't hear about the bombing at the Park Hotel in Netanya until the following day. A suicide bomber blew himself up among the guests who had assembled in the dining room to celebrate the Seder, killing 23 people. The following day, there was a suicide bombing in Jerusalem and then another one in Ariel; that same night, a suicide bomber hit a caf頴hat was about 10 minutes' walk from my apartment. I was at Guy's at the time, and tried to call my friends - but the mobile service providers couldn't handle the volume of calls; the lines had collapsed. On television one of the survivors of the cafe bombing, a guy in his late twenties, was interviewed at the scene. He stood in front of the devastated cafe, the sound of sirens wailing in the background, and told a reporter that his brother had been killed in a terrorist attack during the 1990s, just after Rabin was assassinated, and that he was going to leave the country because he just couldn't take it anymore.

And the next day there was yet another suicide bombing - this time at a popular family restaurant in Haifa. The media made a lot out of the fact that Israeli Arabs managed the restaurant, and that Haifa had always been regarded as a symbol of Arab-Jewish co-existence.

The number of people killed in three of those five terror attacks was in the double digits, and of course there were many more injured.

After the bombing in Haifa, practically all you could hear on the streets of Tel Aviv was the chirping of the birds. Usually Passover week was a time of celebration: schoolchildren were on vacation, and a lot of people had the week off from work as well. It was early spring and the weather was predictably perfect, with temperatures in the low twenties, blue skies and the smell of orange blossoms in the air. The cafes should have been full, but they were empty. So were the streets. I wandered around Tel Aviv in a state of shock.

The windows of the cafe at the Mann Auditorium were filled with sandbags and braced with planks of wood. At Dita, a restaurant on Rothschild Boulevard, all the outdoor tables had been cleared away, leaving an empty concrete plaza. There was a hand-written sign propped up on a chair in front of the entrance, which was locked and guarded by a security guard carrying an automatic weapon. The sign read: We are still open 24 hours. The premises are secured.

All over Tel Aviv, I saw that the chubby middle-aged security guards had been replaced by unsmiling, muscular young men who wore reflective sunglasses and carried automatic weapons slung from a strap on their shoulders, instead of a sidearm in a belt holster. It was all very ominous looking, like a Hollywood action film.

For the first time since the beginning of the violence, in September 2000, normal life was suspended. Parties were cancelled; restaurants and cafes closed early because there were simply no customers; and when I went to see a movie there were only two other people in the cinema. I wrote long, agonized letters to my sister, trying to describe what was going on. She published some of them on her blog. I think I felt a sort of keening need to make sure that someone out there understood the overwhelming sense of fear and grief that gripped us all.

In response to the wave of suicide bombings during Passover week, Ariel Sharon launched Operation Defensive Shield. Reserve soldiers were called up to supplement the regular army, and the IDF entered the West Bank to hunt down the terrorists.

I didn't quite understand the army's logic in deciding which reservists should be called up for that operation. Eran, a 25 year-old who had served as a combat medic, did not receive a call up notice; on the other hand Richard, my friend Ravit's 32 year-old British husband, who barely spoke Hebrew and had served only briefly as a non-combat soldier, was called up to drive a petrol truck in the West Bank. Ravit said he didn't really know how to shoot a weapon. "I kept telling him," she said with half-joking bravado, "Practice, honey. Practice." He was sleeping in the cab of his truck, parking it at night on remote, muddy roads between Palestinian villages and calling from his mobile phone every two hours to reassure her. She told me this at her apartment, during a dinner party that she and Richard had originally planned to host together. She decided to go ahead and do it alone, and all the guests tried very hard to make the evening a success, but we couldn't make the gloom go away. No matter what we talked about, all conversations seemed to lead back to The Situation. We picked at the food. When I went to help Ravit wash the dishes, I saw little notes from Richard pinned on the bulletin board near the fridge: "Please don't forget that I love you very much"; "Take a hot bath and have something to drink. I'll be home to cook dinner."

The next day I was sitting on a stool at an outdoor coffee bar on Rothschild Boulevard, just outside my apartment, when I learned that 12 Israeli soldiers had been killed in Jenin. Gili, one of the brothers who owned the coffee bar, was signing for a delivery of bottled soft drinks when the deliveryman's mobile phone rang. A friend whose brother was in Jenin told him that a group of soldiers on a house-to-house search had entered a booby-trapped house just a few minutes earlier, and that they'd all been killed. Holy shit! said Gili. We've gotta get out of that hellhole. What did he say? Asked the woman sitting across from me, anxiously. I told her and she sighed, saying she didn't know what to think anymore. We have to find the terrorists and stop them, she said, but maybe this isn't the way.

Just then, a taxi stopped at a red light and we could all hear the news on the car radio, which was at full volume, through the open window. The story about the 12 soldiers hadn't been reported yet; the announcer was simply talking about Sharon's most recent speech, which was full of vows to root out terrorism at its source. The driver stuck a beefy forearm out the window, pumped his fist and yelled, "Kick their asses, Sharon! Destroy them all!" Then the light changed to green and he drove off.

That night Eran said that any other country would have sent the air force in and flattened Jenin, instead of risking soldiers' lives with house-to-house searches in the narrow, crowded streets where Palestinian gunmen shot Israeli soldiers from the low roofs. He wasn't the only person who made that observation, but I was too tired to argue about morality. Normal people say extreme things during times of stress.

And in the middle of all that upheaval, I was out trying to find a job again. The bank was calling several times per day about my overdraft, and I was getting desperate, so I decided to overcome my pride and use my connections. I called my friend A., the successful banker whose daughter's brita I described in Part Two, and asked if we could meet. Even though I hadn't spoken to A. in months, he immediately invited me to his office, saying we'd go from there to talk in a nearby cafe.

Hope!

I walked over to the shiny new office tower, took the elevator up to a gorgeous suite of offices furnished with brown leather de Courbusier-style chairs and sofas, and was greeted by a smiling receptionist. A. came out to greet me, and then I noticed that he and the receptionist were the only two people in the sprawling open space. Is everyone out for lunch already? I asked. A. looked at me strangely and said, no, the office was empty because everyone had been let go. The bank had gone bankrupt, and he was just tying up loose ends before vacating the premises in a couple of weeks.

Oh.

Over coffee, A. told me that he'd been considering packing up his family and moving to England until "everything blows over." He stared out the window, and I looked at his shadowed profile as he said sadly, "But I decided that I can't abandon Israel. Not now."

A couple of weeks later, Eva called me from the bank. Cherie, she said gently, I'm sorry, really I am.

My overdraft had reached its outside limit. She had no choice but to close my account until I made a deposit. I had about 50 shekels in my pocket, and no source of funds. I'd hit rock bottom.

That night I wrote a long, anguished email to an acquaintance,-Joan,- who was a vice president at a European investment bank in Tokyo. Two years previously, when I still had my high tech job, she had offered me a position at the bank and I'd turned it down. What were the chances that there would be a job waiting for me now? Incredibly, it turned out that someone had just left and a replacement was needed urgently. Joan said the job was mine and that she would lend me the money for the ticket - but only on condition that I arrived within five days.

Over the next four days I found someone to sub-let my room (a friend of Eran's), I bought the ticket to Tokyo, called my friends to say goodbye, packed a suitcase and borrowed two hundred dollars to last until my first paycheck. Diana drove me to the airport, and we cried the whole way. I didn't want to leave. I felt as though I were uprooting myself from everything I loved, that I was leaving my comfort zone and going to a cold, alien place that I'd never particularly wanted to visit.

But I had no choice. I was a twenty-first century, post-modern economic refugee.