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DELLYS, Algeria (Reuters) - The 15 police checkpoints on the road from the Algerian capital to Dellys are reason enough for an eerie atmosphere hanging over this Mediterranean port town.
Pristine, empty beaches, pine forests and a rambling 2,000- year-old casbah should make it a tourist hotspot, yet Dellys is isolated as it tries to recover from a brutal civil conflict that engulfed the north African country in the 1990s.
Many towns in the restive, mountainous Kabylie province are still struggling to shake off the legacy of violence. With its tourism potential and proximity to Algiers only 130 km (80 miles) away, Dellys might have hoped to fare better.
Mayor Rabah Zerouali had expected improving security would spur inward investment and job creation in the town of 29,000, where traditional industries are sardines and grapes.
He has been disappointed.
"I can tell you we create zero jobs. The situation is very worrying, particularly among the young," he said.
Many Dellys residents joined the Islamist insurgency in the 1990s, but now say terror has given way to a stifling isolation.
Algerian President Abdelaziz Bouteflika, who has overseen the north African country's retreat from chaos since 1999, has promised a $150 billion national development program if he is re-elected this month.
Few weighty opponents have emerged to challenge the 72-year-old Bouteflika, who is widely tipped to win the April 9 polls and extend his tenure to 2014.
Critics say the independence war veteran should make way for a younger generation of economic reformers. Supporters say he deserves the continued trust of the people for having put Algeria on the path to stability.
The next president faces the double challenge of sliding energy revenues and pressure to reverse years of private sector underinvestment that led to an unemployment rate of 70 percent among adults under 30, according to a 2005 official estimate.
Analysts say failure to restore hope to young Algerians could bolster support for remaining Islamist rebels and compromise the OPEC member's chances of long-term stability.
The government is back in control of Kabylie's towns after support for radical Islamism waned among a war-weary population, and a succession of official amnesties prompted thousands of rebels to lay down their arms.
But ongoing clashes between government troops and insurgents, poor infrastructure and cumbersome bureaucracy have blocked investment in the region.
The road from Dellys to Mizrana in the mountains remains closed for security reasons and locals say bored, frustrated youngsters are turning to drugs such as cannabis and amphetamines in growing numbers.
"To the tourist, Dellys is a beauty. To us it is a prison, with the sea on one side and the mountain on the other," said 40-year-old Kouchi Rabeh, a jobless resident.
In towns like Dellys only a decade ago, rival loyalties split friends and families while rebels battled government troops for control of the mountainous region east of Algiers.
Mohamed Houmil, a representative of jihadist group Al Hijra wa Takfir, played a key role in hiring young men from the Dellys area as the fighting began.
Schools and hospitals closed and curfews cut residents off from the outside world. Militias intimidated residents and used murder to settle scores.
Activity is still absent from the Dellys industrial zone, where security guards watch over closed or abandoned buildings.
"I don't know when it's going to re-open," said a security guard sitting outside a factory that once made plastics.
Companies that used to employ tens of thousands have closed because heavy bureaucracy made it impossible for them to continue functioning, said Zerouali, the mayor.
One local investor who tried to start a factory making plastics for agriculture saw his project scuppered by bureaucracy and a lack of timely credit.
"The investor has lost his mind and his money," he said.
Violence returned to Dellys in September 2007 when a truck packed with 800 kg (1,800 lb) of explosives destroyed a barracks at the port, killing 37 people, damaging several houses and shattering windows in nearby streets.
It was one of a series of attacks by Islamist rebels after they adopted the Al Qaeda name and began to mimic the group's tactic of devastating urban bombings.
The new approach has brought extra publicity for the rebels but security analysts say it also increased the risk of civilian deaths and could undermine support for their cause.
Interior Minister Noureddine Yazid Zerhouni said on March 1 that 120 terrorists had been killed since a series of attacks in the Dellys region last August.
The insurgency remains a touchy subject and most people interviewed in the area were unwilling to discuss the influence of Al Qaeda's north African wing. Locals say many of the remaining rebels have relatives in Dellys.
Those who did comment said the group's influence has gradually declined. They suggested local residents now seemed more willing to denounce known rebels.
"The situation has improved," said a local official who asked to remain anonymous for safety reasons. "Several young men have lain down their arms and decided to accept the amnesty."
But some Dellys residents say that as soon as the insurgency died away, the security-minded authorities abandoned them.
"To officials, this region was a no-man's land, a terrorist region where nothing can be done," said Mokrane Allel, a 35-year-old unemployed man.
Now, says another resident, the top concern is drugs: "The young are without hope."
Writing by Tom Pfeiffer; Editing by Sara Ledwith