Will the Arab world’s most ambitious reform program be a casualty of the violence? Some fear the worst is ahead. Neighboring Tunisia, which recently rounded up 300 fundamentalists allegedly plotting to overthrow the government, watched anxiously. “We had a narrow escape,” said one official. “Algeria may not be so lucky.” France, Italy and Spain worried that more unrest could send a tide of refugees to Europe and radicalize Algerian immigrants. The message to Arab leaders was clear: it will not be easy to set up democracy in countries accustomed to authoritarian rule. Said Basma Kodmani-Darwish of the French Institute of International Relations, “Because there will be an Islamic current which is not democratically inclined, turmoil is absolutely inevitable.”

Algeria’s reform program was born amid turmoil three years ago when the Army put down riots by disaffected youths, killing at least 175. Bendjedid pledged to break up the ruling National Liberation Front’s central-planning system, which in 29 years all but bankrupted a fertile, oil-rich nation. He promised free elections and legalized opposition parties–including the fundamentalist Islamic Salvation Front. That shocked his neighbors, but the experiment went smoothly–at least as long as the fundamentalists were gaining.

In a round of voting last year, the Salvation Front took over more than half the country’s municipal governments. Since then, its zealotry has cut the party’s backing among middle-class Algerians, some of the most secular Arabs. Fundamentalists in local government often are more eager to close bars and beaches than to create jobs. The party lost financial aid from Saudi Arabia because it supported Iraq during the gulf war. The Salvation Front denounced the next round of elections as a fraud, insisting on changes in rules it saw as favoring the government. Last month the party launched a general strike. When the walkout flopped, the militants called for the establishment of an Islamic state, along with presidential and parliamentary elections. Bendjedid refused, and Algiers exploded. Says Algerian lawyer Omar Zerguine, “The [Salvation Front] felt the wind turn and victory escape it; its natural state burst forth, which is violence.”

In the aftermath of the crackdown, the Salvation Front told supporters to go back to work, saying the government had agreed to hold both legislative and presidential elections within six months; the government left the state of emergency in place, at least for the moment. But Bendjedid seems determined to push ahead with reforms. His new prime minister, Sid Ahmed Ghozali, strongly supports Bendjedid’s plan. Ghozali, a former diplomat, may try to bring some opposition leaders into his cabinet. Still, consensus building is a decidedly risky game, and there is no guarantee that Algeria’s fundamentalists will play.