Streetcars and desire return to battered New Orleans

The streetcars have come back to New Orleans - just two, in fact - old green trams trundling down part of Canal Street

The streetcars have come back to New Orleans - just two, in fact - old green trams trundling down part of Canal Street. They don't really go anywhere and, with only a fifth of the population back in the city, the streetcar is not much use to anyone.

But as they face into their first Christmas since Hurricane Katrina, the people of New Orleans are eager to embrace every small sign that life is returning to normal.

Christmas trees are few and there is no festive lighting on the streets but restaurants and shops are trying to get into the spirit of celebrating the holiday season in what is left of the city after America's worst ever natural disaster.

Souvenir shops are selling Katrina T-shirts, some with witty slogans about looting, others mocking FEMA, the Federal Emergency Management Agency - "FEMA - Federal Employees Missing Again". One of the most popular says: "Laissez les bons temps roulez - again" (let the good times roll again).

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At Arnaud's restaurant in the French Quarter, with its famous mosaic floor, slender cedarwood columns and antique ceiling fans, Archie and Jane Casbarian are offering a full menu - but only in the evening. Like most businesses in New Orleans, Arnaud's is suffering from a chronic staff shortage because low-paid workers can't find anywhere to live.

"We're hoping things will get better in January. But the city depends on conventions and there won't be any at least until the second half of the year," Ms Casbarian said.

Until this year, New Orleans was the most popular convention venue in the US, attracting thousands of visitors on expense accounts for a few days on the wild side. A librarians' conference is coming in May and New Orleans is grateful for the vote of confidence but nobody is banking on bumper bar receipts that week.

At the Hotel Monteleone on Royal Street, they have suspended room service, closed the fitness centre and told guests that their rooms will be serviced every second day. Antoines, where Tennessee Williams feasted on Oysters Rockefeller (grilled with spinach and cheese), is reopening in January and the first jazz musicians are already back in town.

Thousands of contractors in New Orleans to demolish and rebuild houses, clear debris and restore electricity, help to keep the bars and strip joints of Bourbon Street afloat. Two Hustler clubs have reopened across the road from the Bottomless Topless hostess bar, although women remain massively outnumbered in the city.

Ted Lancaster moved to New Orleans from Los Angeles last year to open a bed and breakfast which is now back in business. "Everybody's hoping but nobody knows what's going to happen to this goddamn place," he said.