BOOK REVIEW / SHORT STORIES : Individual Inner Freedom Flowers in the Harsh Corners of the Desert : DAMASCUS NIGHTS; <i> by Rafik Schami</i> ; <i> Translated from Arabic by Philip Boehm</i> ; Farrar, Straus & Giroux; $20, 261 pages

If you live in the desert, you have two choices: Transform it or learn to live in it. Of the former, there are several brilliant examples: California’s green-lawned communities implanted in brushwood, and Israel’s Negev Desert.

The desert turns out to be the central image in Rafik Schami’s “Damascus Nights,” seemingly not a lot more than a picturesque collection of tales spun by seven old friends over as many hot summer nights in the Syrian capital. It is quite a lot more.

Schami writes his stories--as much in the Arab tradition as tall tales are in the American tradition--only in part for their own sake. It is storytelling that is his theme, and what storytelling means in the life of a people and a culture that have lived through centuries of hardship and arbitrary power.

The seven old friends are attempting to rescue Salim, another old friend. A retired coachman and one of the city’s great storytellers, he has been struck mute. Salim’s muteness, and the notion that his friends can cure it by each telling a story of his own, are part of the thin veil of magical convention draped over Middle Eastern tales. Very clearly we see the reality beneath. It is not a fairy, introduced by Schami at the start, who has struck Salim dumb, but old age with its sudden despairing question: Have art and endeavor been of any use?

Salim’s lifelong endeavor has been to make the desert livable, as a coachman--image of freedom--and as a storyteller. Another celebrated bard who was his remote ancestor proclaimed that the desert--lonely--needed company, and that its reward for those who lived with it was to give them words to paint with.

“Paradise,” the bard believed, “was simply a loneliness overcome.”

Salim’s desert embodies a wider and more intractable constriction: those hardships of geography and history that have formed Arab culture, and the intransigence and arbitrariness of those who have ruled. Flowering in it is the ability of the ruled to yield no more than outward conformity while cultivating and defending an inner freedom and richness: the fountain and shade trees in the courtyard concealed by nondescript white walls.

Stories have given life to the private courtyard and frustrated the public power ever since Scheherazade subverted the intransigence of her Sultan. It is not their quality that is their strength, but the irresistible shift of reality offered by the act of storytelling.

The seven stories told by Salim’s friends--the last of which, in a wonderfully contemporary twist, will restore his faith and voice--vary enormously in quality.

Junis, the cafe owner, tells a luminous story of his hard childhood threshing wheat with his brothers in the August sun. Their mother, ill, would squat nearby to sing them songs and offer the shade of her lap when one grew exhausted. After she died, the brothers set up a tent of sticks beside the threshing floor and named it “Mother.”

One of the friends tells a comic story of his tribulations as an emigrant in America. Others have tales of tyrannical rulers discomfited by their ingenious subjects.

On the other hand, Mehdi, the bookish teacher, tells a slickly over-sweet story of a magic wish, a wicked wizard and two lovers who die fighting him but are set up in the sky as two stars. Faris, the former government minister, tells a story that he proclaims as terribly funny but is terribly sad and bogs down in detail as tedious as an official report. Schami spares us the detail; instead, he gives us the sarcastic gibes of the other old men at their eminent friend.

The company includes a barber, a former convict, a locksmith--in the courtyard, there is freedom and equality. And the sound of neighbors’ radios. A butcher weeps and clutches a pillow as he dances in his tiny room to the voice of an Egyptian pop singer. Others listen to Gamal Abdel Nasser and comment obliquely, wary of intrusive ears.

The time is 1959, Syria and Egypt have been temporarily united, and the current version of public oppression is the activities of Nasser’s police. One incautious neighbor is arrested for comparing the government to a banana. In the streets, everyone walks with a careful public face.

But in Salim’s house, there is a freedom that will outlast the rise and fall of tyrannies and democracies--an imagination aware both of its fetters and of the jeweled calligraphy it can inscribe inside them.