For 25 years, a boom in downtown Kabul (search) usually meant an incoming rocket and ensuing mayhem.

Now, three years after the fall of the Taliban (search), some semblance of normalcy is returning to the capital, and a different sort of boom is capturing people’s attention -- an investment one.

On its face, it’s not a boom most Westerners would recognize. Few streets in the capital are paved, and many are lined with garbage. Walls in western Kabul are still pocked with bullet holes, and the shells of bombed-out buildings stand testament to the post-Soviet civil war that nearly destroyed the city of half a million. Cars compete with livestock at some intersections, electricity is sporadic at best and the incoming rockets have not disappeared entirely.

But for a city that has known little but war and political chaos for a generation, the sight of men rebuilding homes and dealerships full of shiny new automobiles are a welcome change from the recent past. And it’s a dramatically different climate from that in the other front of America’s War on Terror.

“This is nothing like Iraq,” said Austrian-born Franz Zenz, who is making a mint selling fuel and air transport services to everyone from the local airline, Ariana, to the U.S. Agency for International Development (search). “Here you can walk the streets. You can go to dinner with friends. It is completely different.”

Such progress has attracted some 142 foreign companies to Afghanistan in the last 12 months alone, bringing nearly half a billion dollars in capital investment to the country.

Much of that money going into construction. A new $42-million Hyatt is being built, right next to a massive new American embassy. There are shopping centers going up, as well as office complexes and hundreds of private homes. Internet cafes with shiny glass fronts, features unimaginable during the war years, are everywhere, and cellular phones are becoming as common as psychedelic-colored jingle trucks and Chinese bicycles.

Under the Taliban and earlier, back to the late 1970s, such a level of investment activity would have been unthinkable. The savage war with the Russians scared everyone away through the 1980s, and only two foreign companies -- a telecommunications outfit and oil giant Unocal -- dared to brave the fundamentalist zealotry of the Taliban after that.

This inactivity contrasted sharply with the rest of Afghanistan’s history. Smack in the middle of Asia, this country has been an intersection of commerce and culture since the days of Alexander the Great. Suliman Fatimie of the Afghan Investment Support Agency likes to point out that Afghans have been capitalists since long before the word even existed.

The going is not easy for the foreigners joining this boomlet, though. The bureaucracy can be mind-numbing despite government efforts to streamline things, and long-term political stability is still far from certain. Even the most optimistic observers say provisional President Hamid Karzai, who is widely expected to win presidential elections scheduled for this weekend, has a long and difficult road ahead of him.

But Zenz and others like him are nonetheless optimistic. His fuel trucks occasionally fall prey to rebel Taliban attacks and extortion by testy warlords is relatively common, but he accepts that as merely part of the “measured risk” of doing business in a country that is essentially starting from scratch.

“Afghanistan is a new country, and when you work on the frontier, the business frontier, you have opportunities,” Zenz says. “It’s still very much on the edge, and if you’re new here you might not think it’s as good as it could be. But if you’re like us and you’ve been here for two years, it has made a lot of progress.”