I HAD not been to Cambodia for two years and was not prepared for the astonishing transformation. Then the sun beat down on a languid Phnom Penh decaying after 15 years of international isolation - there was no ''peace process'', there were no United Nations blue berets and white vehicles. It was a city of gentle anarchy, of bicycles and mopeds and silhouettes strolling at night down the centre of a road, lit by a single headlight. Now the streets were a cataract of white vehicles, jeeps with flashing lights, Mercedes-Benzes with brocade seat covers, Suzukis with whores on call, bicycles with filing cabinets on delivery, elephants announcing Cambodia's first take-away pizza and, atthe margin, legless or armless young men in military green, like crabs awaiting their chance. Watching them reminded me of the dream-like quality of Cambodia, a society whose fabric was torn apart and never repaired, whose trauma endures near the surface. Suddenly, and for no apparent reason, the traffic swelled like an engulfing wave, spilling aside pedestrians and vendors. One of the human crabs was struck by a bicycle and raised his only fist. Someone screamed. Open in their sorrow, the Cambodian people are often oblique in their fear; and the presence of fear is palpable now. The skulls of Cambodia are famous; it is the internal bleeding foreigners cannot see. Before they disappeared back into the jungle this month, the Khmer Rouge were back in Phnom Penh, the scene of their great crime. They had been brought back by the UN and given a second chance. They are now merely a ''faction'', legitimised and accommodated by the ''world community'' and wooed unsuccessfully to take part in elections next month, after which the UN will get out. The dream-like quality is verging on nightmare. On my first day back, I walked to the Khmer Rouge compound, just behind the royal palace. Surrounded by a high wall, it has air-conditioned flats and offices, including a boardroom with comfortable sofas where UN officials, diplomats and journalists waittheir turn to see Pol Pot's men. I met a man called Chhorn Hay, who had a fixed smile and opaque eyes and spoke perfect English. Lining up with others, I found myself shaking his hand and regretting it. ''So nice to see you again,'' he said to us all. ''Yes, of course, we shall consider your request for an interview. Please leave your hotel room number in the visitors' book . . . thank you so much for coming to see us.'' As we left, their grey Mercedes-Benz was being dusted down. Chhorn Hay called out: ''Be careful. You may need an umbrella. Bye, bye, bonsoir .'' Did this happen? Were the Khmer Rouge really here, wearing suits and saying, ''bye, bye, bonsoir ''? For me, standing at their gates, all the disingenuous semantic games and the contortions of intellect and morality that have tried to give them respectability and make the ''peace process'' appear to work, took on a vivid obscenity. I realised I had walked down this road on the day I arrived in Phnom Penh in 1979, in the aftermath of a holocaust in which more than a million and a half people were killed. Then, it was as if a nuclear cataclysm had spared only the buildings. Houses, flats, office blocks and a school stood empty and open. At the railway stations trains stood empty at various stages of interrupted departure. Pieces of burned cloth fluttered among debris on a platform; the Khmer Rouge were said to have put a carriage of wounded to the torch. When the afternoon monsoon broke on that day, the gutters were suddenly awash with money. The streets ran with money, much of it new and unused banknotes which sluiced from the ruin of the National Bank of Cambodia. Inside, a pair of broken spectacles lay on a ledger. I slipped and fell on a floor smothered with coins. Boxes of new notes stood where they had been received from the supplier in London five years earlier. The few human shapes I glimpsed seemed detached from the city itself. On catching sight of me, they would flit into the refuge of a courtyard or a cinema, long-abandoned. Only when I pursued several, and watched them forage, did I see they were emaciated children. In a petrol station an old woman and three children squatted around a pot containing a mixture of roots and leaves, which bubbled over a fire fuelled with money: thousands of snapping, crackling brand new notes. Today there are 22,000 UN troops and officials in Phnom Penh. They have 8,000 white vehicles, their own aircraft, villas, bars, hospitals, brothels and camp followers. Two years ago one case of AIDS had been reported, now there are 60, at least. Thai ''massage parlours'' have shipped in Vietnamese girls, ''the cheapest in Asia'', according to a ''manager''. Street children are a speciality. The head of the UN Transitional Authority, Mr Yakushi Akashi, has said of his peace-keepers: ''Hot blooded boys will be boys.'' A memo distributed to UN personnel says: ''Please try not to park your Land-Cruiser outside the brothels.'' At least parked they are not harming people. The true number of people killed and injured by UN vehicles driven recklessly is suppressed; it is believed to be more than 100. More often than not the drivers act like conquerors. Long before the UN came, long before Pol Pot, under the God-king Prince Norodom Sihanouk, Phnom Penh was divided between a mandarinate and those who served it. In the early 1970s, after Prince Sihanouk had been overthrown in a military coup, Phnom Penh divided between transient foreigners and Cambodians escaping the American bombs, waiting for Pol Pot. Today, the sense of deja vu is profound. Is this the same honky tonk Phnom Penh as just before Asia's Hitler took power? Once again, it is run by and for foreigners, at whom children shout: ''Hello, goodbye.'' Once again, the beggars press their stumps on the windows of restaurants that are often exclusively foreign, a distinction measured in dollars. The UN has it own generators; elsewhere a single bulb is a luxury. UN personnel have their own clean, running water - or Evian at US$3 (HK$23) a bottle - while thousands of children continue to die from preventable, intestinal diseases carried in the city's contaminated water supply. At a special UN conference in Tokyo last year, the world community pledged US$880 million to ''rehabilitate services'' in Cambodia. This was hailed as the ''foundation'' of the ''peace process''. The aid would be delivered as an ''emergency''. The UN's creative accountants say US$40 million has been ''committed''; the truth is that the drop has yet to reach the bottom of the bucket. Flicking on his air-conditioner with a remote control, the Phnom Penh representative of the UN Development Fund, Mr Edouard Wattez, assured me: ''The money is coming in quite significantly.'' I asked him which government had given the most. ''The UnitedStates,'' he said. ''They have pledged US$60 million.'' I asked him how much of this had arrived. ''US$2 million, for road repair,'' he said, wincing. And this ''road repair'' has, in fact, restored a network of strategic roads from Thailand into Cambodia along which the Khmer Rouge mount checkpoints and move ammunition and supplies. Every UN ''peace-keeper'' receives a ''hardship fee'' of US$145 a day on top of salary and perks. This is more than most Cambodians earn in a year and twice the monthly wage of a Cambodian risking his life to clear the landmines that UN personnel will not touch. I visited an aid official in his air-conditioned office, which was cold and obsessively tidy; the only sound was that of his computer printer. We could have been in London or Los Angeles; and I was struck by the distance created between him and the precarious life outside the tinted windows. At the Cambodiana Hotel, a ''luxurious'' monstrosity on the banks of the Mekong, this distancing is complete. Ordinary Cambodians are not allowed in. The Austrian manager is fastidious; no beer cans on the table, please. There are photographs of dignitaries in the foyer, including Lord Caithness, former minister of state at the Foreign Office and promoter of the Khmer Rouge's place in the ''peace process''. A man from the International Monetary Fund lives there. True to its skills, the IMF unearthed a ''debt'' of US$65 million incurred by the Lon Nol regime in 1971. Interest has apparently been ticking over for 22 years. A foreign ''consortium'' would pay this off, I was assured unofficially, in return for the ''appropriate trade concessions''. At a cocktail party, overlooking the pool, the talk was about the corruption that is ''a way of life'' in Phnom Penh. No irony was noted.