I'm riding in a car from Berlin to Potsdam. It's a winter evening and the weak sun is setting over the grey ice on the Havel River as we cross the Glienicke Bridge. I'm looking forward to an evening at one of those Potsdam cafes where heavy curtains hang over the door to keep both the warmth and the smoke in. I'm falling into a sort of central European reverie - until I see the sign, in letters that seem taller than our car: "Bush, Fuck You". Americans who travel to Europe are accustomed to this kind of poster. If we took them all as personal attacks, we would not travel there in the first place. Still, it is a small shock to find this sign, this year, on the Potsdam side of this particular bridge.

For I love Berlin, and I love, most especially, the Glienicke Bridge. In the more than two decades that I've been visiting the city, the bridge has become my own private emblem of Germany's transformation from cold war to the political thaw of the 1990s to reunification. Until recently, that transformation seemed to be about positive things - about the possibility of comity and respect among nations. And, above all, in a universal way, about political progress. Regardless of what one thinks of President George W. Bush, this bridgeside sign was a missile of rage against the US generally. To see the bridge become a launching pad for such a blast was to understand that we have not made as much progress as we had all once hoped for.

I first came to Berlin to live in 1982. I was turning 22 and the wall was turning 21, so we were becoming adults together. It was a time of protest. In West Berlin, anti-American posters hung out of apartment windows, most focusing on the imminent deployment of intermediate-range missiles by Nato on German soil.

I had a fellowship to write about the squatters who had taken over buildings in gritty West Berlin neighbourhoods such as Kreuzberg, Wedding and Schoneberg. But in the end, I spent only several afternoons visiting the squats. It turned out the squatters were draft protesters or students who passed their afternoons chopping carrots for communal dinners and preparing flyers that explained how to remove a cobblestone from the street so you could throw it at a policeman. Their anger seemed more generational and hormonal - a stage - than political. More intriguing were ordinary Berliners: a Wilmersdorf lady named Karin from whom I rented a room; a teacher from a gymnasium in Reinickendorf; a journalist who was an expert on Vespas and other toy-like postwar vehicles. They all used a special word when they described their life in Berlin: hangengeblieben. They would say: "I came to Berlin to study (or work, or visit) and then remained here, hangengeblieben." Or, "He came from the east, and then moved to Stuttgart, but his daughter is still in Berlin, hangengeblieben." It translated as "stuck" or "stuck hanging" and it was used in part to describe a kind of laziness or indecision (such as someone who couldn't finish a university course) and in part to describe the consequences of the division of Berlin - "stuck" meant waiting for the wall to come down. At that time, the elimination of the wall seemed a distant prospect. My friends dismissed any explicit discussion of "no more wall" as ridiculously utopian. It was regarded as gauche to talk about "capturing" the east bloc or "democratising it"; only idiots from Radio Free Europe used such language. The scorn for such thoughts was strong, as strong as the scorn that is now heaped on those who talk about democratising the Middle East. But more about that later.

Still, my Berlin friends were, one way or the other, preoccupied with their wait. And while they waited, they showed me their West Berlin, a city that seemed to consist entirely of edges. One friend took me into East Berlin via the big east-west crossover point of Bahnhof Friedrichstrasse. This smelly yellow-tiled construct was known as the "Palace of Tears" because visas over to East Berlin for West Berliners often lasted only until midnight. Here, like so many Cinderellas, easterners and westerners said their evening goodbyes. My friend's wife was from East Germany and when he spoke of her, one sensed that he believed that by bringing her west he had done his bit fighting the cold war. We also visited a place whose name served as a reminder of the city's disorientation - Berlin Mitte, or "central Berlin". After the erection of the wall, this centre suddenly became part of the east - Berlin's dividers were so powerful that they could change the compass itself. Yet another Berliner took me to Checkpoint Charlie, that provisional drywall and sandbag crossover that had become, it seemed, permanent. But of all the crossovers that the waiting Berliners showed me, the most compelling was the steel Glienicke Bridge. On "our" side stood a small castle built by Karl Friedrich Schinkel, classic and spare. Then, though, came the familiar warning placard - "You are leaving the American sector" - and the guards. This was the place west and east exchanged spies, the best-known trade at the time having been the 1962 release of Francis Gary Powers, the American U-2 pilot who had been shot down over the Soviet Union in 1960, in return for Soviet spy Rudolf Abel. It seemed somehow terrible to have this border in such a leafy, architectural place. Even the bridge's name was painful: the East Germans had rechristened it the "Bridge of Unity".

Two things struck me about my cold war tour guides. First, they were actually angrier than the squatters. Moreover, long before my arrival they had decided to direct that anger not at the fantastically unsuggestible east, but at the US and its proxies (people like me). "You did this to us at Potsdam," they would say, "and that is why you now cannot cross the Glienicke Bridge to go see the room where Attlee met Stalin at Cecilienhof." My friends tended to suspect that Britain, France and the US would never leave Berlin voluntarily. I hoped they were wrong, but I wasn't sure.

The second striking thing was an attitude that seemed to contradict this focus on external forces. It was their conviction, almost religious, that they could change the fate of Germany by becoming more virtuous. After all, as they knew well, their parents and grandparents had brought the division of Germany upon themselves. Now, they supposed, it was up to them to end that division. They devoted themselves to the moral mission of repentance and compensation for the past, the unspoken idea being that they might earn an end to the allied occupation of Berlin, and an even greater political independence for West Germany.

Virtue my friends defined as pacifism and inaction. They spoke excitedly about Ben Kingsley in the film Gandhi and about the Greens, the new pacifist party which that year won its first seats in the Bundestag. Likewise, my friends were certain that the pressure that President Ronald Reagan had placed on the Soviet regime had damaged the cause of freedom. And finally, they attached enormous importance to improving life through German-German relations.

They were not entirely wrong. In the 1970s, the agreements struck by Willy Brandt with some eastern bloc states and the Soviet leadership did much to lighten the lives of Berliners, especially by facilitating cross-border travel. Even the bridge benefited: under a 1985 agreement between West Berlin and the GDR, it won back its original neutral name becoming, again, "Glienicke Bridge". What's more, by proving themselves to be good democrats and good Europeans, citizens of the Federal Republic showed the world that they were worthy of reunification. But the view that national liberation could emanate from the truncated bits of Germany also depended on an element of fantasy. For the division of Germany could end only when the Soviet empire started to crumble - not before. As late as March 1988, three easterners stole a truck and crashed their way across the 984ft bridge through electric fences and pole barriers; detente notwithstanding, they were still desperate to make it to West Berlin. When the wall did come down, I returned to Berlin to celebrate. I walked around the Brandenburg Gate with Karin and photographed the uncertain East German soldiers standing on the lip of the wall. On another visit, I travelled to the Spreewald for a novel experience, a boat trip in the GDR. Still later, a friend and I drove over the now-open Glienicke. As we sailed across we accelerated, in exhilaration. To me, and to my German friends, these changes seemed fantastic, impossible. We were all giddy whenever we crossed an old checkpoint, exclaiming to each other, "now I'm in the east" or "now I'm in the west". Visiting East Berlin, or for that matter, eastern Europe, was like waking up one morning to find a new room in your apartment that you never knew existed - impossible, and impossibly good news.

Beyond this, there were several things to note about Germany's reunification. The first was the degree to which the detested "cold warrior" view of communism turned out to be accurate. East Germany was not, as had been reported, the seventh or eighth largest economy in the world. Sadly for its people, the value of its industrial plant was close to negative. Communism in East Germany or eastern Europe had not been more humane; on the contrary, it had hurt the environment (much of East Germany was polluted beyond measure) and stunted the people. Even East Germany's famous athletes turned out to have been tainted; they were drugged, and heavily. Second, the US, Britain and even France did not prove to be the truculent aggressors many Germans had expected them to be. After some reflexive hesitation (Mrs Thatcher at Chequers) the Allies facilitated reunification, allowing Chancellor Helmut Kohl enormous freedom to negotiate, and promptly withdrew from Berlin. These seemed extraordinary acts of good faith, bankable for at least a generation. But last, and most important, reunification seemed to prove that military might coupled with external pressure for democracy could bring down heinous regimes. (Or, to put it in the current President Bush's language, "Stop evil".) East Germans' longing for freedom had not liberated them. It was the west's threat that had achieved that; the Soviet Union simply could not compete in the arms race and sustain a command economy. The German lesson - and the Soviet one overall - was that long-term military pressure was sometimes worth applying, and that democratisation projects were worth supporting, even in improbable places. Germany's transformation was cause for optimism: if only nations acted, then improvements beyond imagination could result. But over periodic visits during the next decade, I came to learn that these sunlit conclusions were not shared by my Berlin friends. To be sure, we agreed about the second world war: Karin and I attended Schindler's List and hashed out the old "collective guilt" question afterwards on the long staircase up to her apartment.

But the general lesson they took from the past, and even from reunification, was that the only way to prevent future trouble was by keeping one's head down, hoping to avoid trouble, and continuing one's own national self-improvement project. In the view of Berliners, Mikhail Gorbachev, through his restraint, had made German reunification possible; Reagan had got in the way. East Germans had done their part by not provoking the Kremlin. These same friends argued that the key to future stability was pacifism, or as a very last resort, international work through the United Nations.

This past winter I returned to Berlin to find the locals pessimistic. My friends and I chatted about different things, but our conversations always ended up at a single place: Iraq. At dinners in the new Berlin Mitte (yesterday's news to them, but still amazing to me) one Berliner or another shouted about the "impossibility" of the Iraqi project. My friends seemed to believe that the best thing they could do was to retreat to that 1950s nuclear freeze motto, ohne mich, "without me". They seemed to assume that the more modest, the smaller Germany made itself, the safer it and the rest of the world would be. On the sixth week of my visit, 500,000 Berliners protested against the war in Iraq, lining streets from Alexanderplatz into the west. If only we can mount a demonstration big enough, they seemed to be saying, we can improve life the globe over. To many of us - British and Americans - this attitude was irritating. Where was all the good will our governments had earned through aid and restraint? Where was the lesson of Yugoslavia, which showed that blue helmets alone could not prevent massacres, and that regime change was necessary? But the real problem with this view was that it seemed a fallacy. Germany might want to pretend it is Switzerland. But this is as pointless as an elephant hiding behind a slender palm. For there is, alas, no such thing as a big neutral country. As much as Germany wishes not to take sides, it is, in effect, taking sides no matter what it does. And no matter how much one disapproved of the Bush administration, one could not help but see that Saddam Hussein was emboldened by his discovery that there was a gap to be exploited between the US and its allies. In this context the mid- war discovery that Russian generals had helped Saddam did not come as a complete surprise. But where did this experience leave me and my friends? For the first time in my long relationship with Germany, the differences began to feel serious.

For me and for many American and British people, the second world war seemed a legitimate and powerful argument for the war in Iraq. For Berliners, it was not. The arguments of my friend Karin were, as usual, the clearest. Hardly a a day went by, she said, that she did not think of "it" - "it" being the second world war of her childhood. She had believed the crumbling of the wall to be the end of that war; now we, the Americans and British, were starting just such a war again.

Pondering all this, I cycled one morning to Glienicke. There, for the first time, I noticed a plaque commemorating the return of the bridge to everyday life after so many years. "Glienicke Bridge," it read, "open as a result of the peaceable revolution in the GDR." How wonderful it must be, I thought without irony, to believe that by self-improvement and restraint, we can end tyranny. Would that it were so.

Amity Shlaes spent January and February in Berlin as a J.P. Morgan Fellow at the American Academy. She will return to her post as a senior columnist on the FT this summer.

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