Then come those flag bearers of Western culture, the Americans.

Arthur Phillips' debut novel, "Prague," is both a story about a group of expatriates and a story about a Central European city in the confused euphoric throes of 1990. This city is not Prague, as the title would suggest, but Budapest. The novel centers around a group of five disparate Americans. At its center is John Price, a journalist who begins to live a strangely unfocussed, Jazz Age kind of lifestyle; he falls desperately in love with another member of the group, the categorically uninterested Emily. More intriguing is Charles (Karoly) Gabor, a Hungarian who grew up in the U.S. and has returned to the land of his parents for business opportunities. He is a ruthless man and very critical of Hungarian culture, but at the same time, Phillips somehow makes this character eerily likable.

The five Americans' stories are competently told, but where Phillips really shines is in his portrayal of Hungarian characters, who make 1990 Budapest dance off the page. From the sulky, disinterested waiters and bartenders to a randy antique shop owner, Budapest comes alive through the quirkiness of its inhabitants.

And what of the novel's title? Why is "Prague" set in Budapest? Prague exists throughout the novel only as a distant Arcadia. It is a place where everyone would rather be, a place where life must be grander. The title, like the general theme, is an intense wish for impossible things.

"Prague"
By Arthur Phillips
Random House, $24.95, 367 pages

Also by Michael Sauer