'They let the dogs yap'

The potholed alleys and bustling coffee houses of Gamaliyya, in Islamic Cairo, along with chanting incense burners and queues for oven-fresh bread, are familiar from the novels of Naguib Mahfouz, the only Arab winner of the Nobel prize for literature, who died in 2006. But as I discovered on a visit to the 40th Cairo International Book Fair, other faces of this city, dubbed the "mother of the world" in the Thousand and One Nights, are emerging in fiction.

The Yacoubian Building of Alaa Al Aswany's Arab-world bestseller of 2002 was inspired by an art deco edifice in downtown Cairo, whose decline in the 1970s from luxury apartments to rooftop slums was a symbol of the city's overpopulation. Ahmed Alaidy's novel Being Abbas El Abd (2003) moves frenetically on minibuses and through malls, while Taxi (2007), by Khaled Al Khamissi, grew from encounters with some of Greater Cairo's 80,000 cabbies, who live amid the choked traffic and smog that can turn a short hop into a perilous epic. Written in frank street talk, the linked tales put different aspects of Cairo life in the headlights, from police corruption to the political stagnation under Hosni Mubarak, Egypt's president since 1981. As one driver says, "in our elections there's a boss who fixes everything so that we look like a country that's 100 per cent democratic".

Last year, Taxi and Al Aswany's second novel, Chicago, set among Egyptians in the US after September 11, broke records for Arabic sales. While the print run for novels here seldom exceeds 3,000, Chicago sold more than 100,000 copies, and Taxi some 60,000. (Taxi will be out in English translation in April, to coincide with an Arab world focus at the London Book Fair, with Chicago due later this year.)

Cairo's annual book fair in Nasr City is the oldest and largest in the Arab world. The city publishes an estimated three out of five Arabic books; only Beirut can compete. Run by the state's General Egyptian Book Organisation, the fair was opened by President Mubarak, who vowed solidarity with the Palestinians crossing the breached Gaza border to the east. The outlawed Muslim Brotherhood (whose "independents" hold a fifth of seats in the national assembly) later protested that his words did not go far enough.

The state funds schemes for literacy and libraries, and an ambitious translation centre; it is also the Arab world's biggest publisher. It claims to have special police combating piracy in a country where forgers write entire books under another author's name. Yet, according to some people, subsidised state publishing is part of the problem. Selling books below cost price can undercut commercial presses, in effect controlling what gets published. As one author put it, "the regime is intelligent enough not to allow real writers to survive from their writings".

However, large commercial publishers can thrive partly through distributing across the Arab world. Among them is Dar El Shorouk, which has just signed up three young Egyptian bloggers - all women - for debut novels. There are also daring small presses such as Merit, founded in 1998 by Mohamed Hashem to nurture young authors, and the first house to take a risk on The Yacoubian Building, as well as Al Aswany's tales, entitled Friendly Fire. Such successes reveal a hunger for fiction that reflects everyday life.

Reading is being fostered by new multimedia bookshop chains such as Diwan, and recent bestsellers have given the lie to the old joke that Egyptian novels have only two readers: the writer and the censor. But what about state censorship of books? The official line, given to me by the artist and culture minister Farouk Hosni, is that there is none, though anyone can take publishers to court. "Egypt is not Europe," the minister says: in deference to a "very conservative" community, the state will not itself publish "what could be against religion". But there are no restrictions on the internet.

Bloggers posting video clips of police torture have admittedly held at least a couple of policemen to account (two officers were sentenced to three years in prison in November). But Karim Amer, winner of the Hugo Young award for journalism in 2007, is serving four years for a blog deemed to insult religion and the president. As part of a crackdown on journalists that began last autumn, one editor faces jail for broaching the subject of the 79-year-old president's questionable health.

Al Aswany is sceptical about the nation's cultural prospects given that "torture is a daily practice and there are 60,000 detainees without charge". He belongs to Writers and Artists for Change, part of the opposition movement known as Kifaya (Enough). While the government makes much of the array of opinions to be seen on newsstands, Al Aswany makes a distinction between "freedom of expression as a tool of democracy" and mere "freedom of talk as a decoration of the regime". Taxi's author, Al Khamissi, whose journalist father and uncles were imprisoned under Nasser, tells me a "chattering class" is left free to write books in the knowledge that they can neither reach a mass audience nor effect political change. "They let the dogs yap," he says.

Books, particularly imports, still risk confiscation. Foreign publishers at the fair reported that some of their titles had been seized at Cairo airport, including works by Elias Khoury, Hanan al-Shaykh and Milan Kundera. Within 48 hours, the volumes were returned and allowed on to the stalls. No explanation was given.

Trumpeting freedom of expression while keeping people guessing where the limits lie is a shrewd instrument of control. As I found when I tried to view the interior of the Al Azhar mosque in what I took to be modest attire, only to be told to wear a sackcloth - the rules can shift arbitrarily according to the whim of the gatekeeper. I walked away: writers may not always have that freedom.