Dubai, United Arab Emirates

In a place where a gallon of gasoline is almost as cheap as a liter of bottled water in the U.S., anything seems possible.

With the world's tallest skyscraper and most opulent hotel, plus solar-powered parking meters, desalinated seawater from the taps, indoor alpine skiing and a new archipelago of artificial islands, the desert city of Dubai has transformed itself so completely that it now figures as one of the Eastern Hemisphere's great, cosmopolitan centers, on a par with Singapore and Hong Kong.

But wedged on the Persian Gulf between Abu Dhabi and Sharjah (two of the seven mini-states that make up the United Arab Emirates), it is off the radar of many Westerners as a destination. When it's thought of at all, it's considered faraway, exotic and possibly dangerous, although the State Department has issued no warnings on it and the agency's website says crime is not a problem.

After passing through Dubai International Airport several times on my way from Europe to the Far East, I finally decided to see the city-in-the-making during the Dubai Shopping Festival, which began Thursday and continues through Feb. 24. The fest celebrates the city's favorite pastime with fireworks, concerts and up to 75% reductions on designer fashions, jewelry, electronics and curios from all over the Middle East, Africa and Asia.

The shopping was grand, the winter weather not unlike that in L.A. (summers, though, are much hotter) and I never worried about my safety.

But Dubai was the real amazement, a fast, sprawling, glitzy city that seems as ethnically diverse as Los Angeles and almost as surreal as Vegas. It contradicts clichés, changes radically from one year to the next, dreams big and -- so far -- always seems to win at what it gambles on.

I told Chris O'Donnell, the Australian-born chief executive of Nakheel, a government-linked real estate developer building four clusters of islands, that Dubai didn't seem real to me.

"You have to ask yourself what is real and what's not -- L.A. and Sydney [Australia] or this place," he said. "Maybe Dubai has the pioneering spirit that has disappeared in America and Australia."

A TINY STATE

Dubai the city is the heart and hub of a mini-state a little bigger than Rhode Island, with a population of 1.6 million, that sprang up in the 1830s when the Al Maktum clan from Abu Dhabi settled along an inlet of the gulf known as Dubai Creek.

It was a protectorate of Britain, sustained by trade between the East and West, and by fishing and pearl-diving, until 1971, when the British left and the United Arab Emirates was born.

Oil was discovered offshore five years earlier but in amounts dwarfed by the vast reservoirs in nearby Saudi Arabia; it's expected to give out in the next few decades.

So it wasn't black gold that put Dubai on the road to El Dorado. It was the vision of Sheik Rashid ibn Said al Maktum, the emirate's beloved ruler from 1958 to 1990. He spurred the shipping industry by dredging the creek, gave the emirate one of the world's largest man-made harbors and built the city's first skyscraper, the Dubai World Trade Center, in 1979.

His equally farsighted son, Sheik Mohammed, reigns over an officially Islamic Dubai where smoking is banned in restaurants and hotels. (Many serve alcohol, but it's otherwise generally unavailable in shops.)

All religions are tolerated here, and women are welcome in the workplace, whether they're wearing Donna Karan or traditional floor-length black abayas. Manal Shaheen, a top female executive at Nakheel, is, by all reports, a force to be reckoned with. On one of my many taxi rides across the city, I had a female cab driver who wore a pretty pink abaya and had salty salutations for anyone who cut in front of her.

THE ATTRACTION

People come to Dubai from about 180 countries to make or spend their fortunes in this land without taxes. They account for a remarkable 80% of the population -- Indians, Africans and Southeast Asians in low-paying service and construction jobs predominate.

Although some of the richest Dubai emirs own mansions in ritzy Jumeirah Beach and trade in their Bentleys for new models every year, those immigrants with the lowest-paying jobs make as little as $150 a month and have difficulty getting visas for their families. Their plight is seen as one of Dubai's major problems, along with traffic and pollution caused by rapid and ongoing development.