Innocent lives and property are not all that have been lost in Naroda Patia. So, too, has the possibility that Hindus and Muslims can live here together in peace–the core of India’s secular dream. On the wall that separates the decimated Muslim streets from the untouched Hindu neighborhood next door, there is a chilling message chalked in neat Hindi script: THIS IS THE KINGDOM OF LORD RAM. NO MUSLIM CAN STAY HERE. INDIA IS FOR THE HINDUS. As Lalmiya surveys the ruins, a portly Indian policeman approaches. “You’d better leave now,” the cop says. “You’re not safe here.” Lalmiya, head bowed, obeys. Less than 100 meters down the road, he catches a glimpse of a former Hindu neighbor. As if spooked by a ghost, Lalmiya turns and dashes out of sight.

Disappearing is nothing new for India’s 150 million Muslims. They form the second largest Muslim community in the world (only Indonesia’s is bigger), but outside of Kashmir, they are nearly invisible on the global stage. Even after September 11, with the West riveted by the threat of militant Islam, Indian Muslims have been easy to ignore. And why not? The form of Islam that has flourished in India is a gentle strain that seems resistant to radicalization. Moreover, as a minority, the Muslims who stayed behind after the bloody partition of India and Pakistan in 1947 have always been the most fervent supporters of the secular ideals espoused by Mahatma Gandhi and Jawaharlal Nehru. The result is a point of pride: they are the only Muslim population in the world to enjoy such a long and virtually uninterrupted period of democracy–54 years.

But the world can no longer afford to look away. Not every Muslim in India faces as menacing a threat as the residents of Gujarat, where more than 825 people–almost all Muslim–have been hacked, shot and burned to death in the past six weeks. But the fear and anger created by that orgy of violence have only exacerbated a disturbing trend–the ghettoization of the Muslim community. Over the past decade, as India has tried to hitch its fortunes to the global economy, its Muslim minority has fallen farther behind the Hindu mainstream. Why? The most obvious culprit is the rise of Hindu extremism, which has infiltrated everything from school textbooks to government policies. But critics say the Muslim community itself has not given sufficient attention to education, entrepreneurship and achievement. And now many Muslims are retreating more deeply into their religious identity, embracing a more conservative brand of Islam and, in some cases, turning away from the modern world. Says Saeed Naqvi, a Muslim intellectual in New Delhi: “The fact that this huge Muslim population is not sharing in the country’s progress is dangerous for India and the world.”

India likes to tout its successful Muslims, such as two former presidents, the country’s richest man (high-tech guru Azim Premji) or Bollywood heartthrobs like Oscar nominee Aamir Khan (box). But the vast majority of Muslims live in extreme poverty, and they’re being pushed deeper into the ghetto. Muslim representation in the National Legislature, or Lok Sabha, has dropped from 9 percent in 1980 to 5 percent today. Discriminated against in almost every field, most Muslims eke out a living as cobblers, tailors, artisans or rickshaw drivers–earning an average of $78 a month, compared with $95 for Hindus. “The country has moved forward, but Muslims have not kept in step,” says Syed Shahabuddin, a Muslim political leader in New Delhi. He points out his window at Jamia Nagar, a sprawling Muslim slum. “There’s not a single public school here. Do you call that equality?”

The worst may be yet to come. While 70 percent of Hindu children from ages 6 to 14 attend school, less than half of Muslim children do. Muslim parents often pull their kids out of school to earn money for the family. But in recent years more Muslim students–especially girls–have withdrawn as a reaction to the Hinduization of the public schools. Muslim literacy rates are, on average, 5 percentage points lower than the national level. Experts believe that, unless school enrollment rises, the gap will continue to grow.

How did this state of events come to pass? The answer, in part, lies in India’s convoluted history. In 1947 most Muslims hailed independence as the end of 200 years of British colonialism; some Hindus, however, perceived it as the end of 1,000 years of foreign domination, beginning with the invasion of the Moguls. (The vast majority of Muslims in India are descendants of lower-caste Hindus who converted to Islam under the Mogul Empire.) The riots that accompanied partition only drove the wedge deeper. Hindus blamed Muslims for dividing India. And as Muslim elites migrated en masse to Pakistan, they left behind an orphaned community–poor, uneducated and leaderless. Muslims today account for 12 percent of the population, compared with 33 percent before independence–and they are spread out in areas where they are a minority and thus politically disempowered. “Partition put Muslims under the complete domination of the Hindus,” says Rafiq Zakaria, a leading Muslim politician and intellectual. They may be “the second largest Muslim population in the world, [but] they are still slaves.”

Still, there was the glittering dream of Indian democracy. Nehru, the first leader after independence, tried to create a secular state that would respect all religions equally–and stave off communal violence. But that dream started to fade by the late 1980s, as India’s political landscape fractured into a kaleidoscope of parties based on caste, region, language and–most explosively–religion. The Muslims lost their political cover, as the Congress party (still controlled by Nehru’s descendants) fell to an upsurge of Hindu nationalist parties, led by the Bharatiya Janata Party (BJP). Why haven’t Muslims formed a party of their own? It’s not simply that they are weak and splintered. Fearing a backlash, Muslims still see broad-based, secular parties as their best and only effective defense.

Yet that secular ideal has been looking fairly threadbare since 1992, when howling mobs of Hindu zealots tore down a 450-year-old mosque in the town of Ayodhya with their bare hands. The destruction of the mosque, supposedly built on the birthplace of the Hindu god Ram, led to riots in which nearly 2,000 people, mostly Muslims, were killed. In Ayodhya today, as in most towns across India, Hindus and Muslims get along well enough. But the ideologues who fanned the flames of the Ayodhya conflict have only hardened their positions recently. Mohammed Ansari, a 77-year-old local Muslim leader, says the government has used its endorsement of the United States’ war on terror to further harass local Muslims. Government agents have descended on Islamic religious schools, shut down a local Muslim market and issued Ansari, one of Ayodhya’s best-known citizens, a bogus electoral card that makes him ineligible to vote. Ansari asks: “Is this our country or not?”

The answer in Gujarat, sadly, is clear. The latest spasm of violence began when a train full of Hindu zealots returning from Ayodhya arrived at the station in Godhra. The kar sevaks, as the Hindu militants are known, reportedly refused to pay a Muslim tea vendor, forced Muslims to sing praises to Ram and then allegedly brought a Muslim girl into their car. The enraged response–young Muslim men killed 59 Hindus, mostly women and children, when they set two train cars ablaze–succeeded only in turning every Muslim in Gujarat into a target. The Hindu mobs that swarmed into Muslim communities over the next three days were exacting more than just an eye for an eye. As they killed hundreds of Muslim men, women and children, they were carrying out a more sinister policy, one that is embraced by a wing of the ruling BJP: the purification of a Hindu state.

Nowhere is the religious cleansing more horrifyingly apparent than in Jawan Nagar, a village 15 kilometers north of Ahmadabad. For more than 50 years, the village was split evenly–and by all accounts, harmoniously–between Hindus and Muslims. Today the Hindu side seems almost normal: children play cricket, men chew betel nut, women in bright yellow saris sweep the dirt out of their neat little homes. But walk 20 meters down the road and the landscape resembles a bombed-out war zone. The rubble-strewn Muslim streets, empty except for a stray cow and a group of Hindu looters, only hint at the atrocities that happened here. In one home, pots are on the stove, toothbrushes are in their plastic cup and the calendar is stuck on Feb. 28. The floor is covered with pools of dried blood. Above the door, a tricolor decal proclaims: I (heart) INDIA.

The violence in Gujarat has left nearly 100,000 Muslim refugees, and most are too scared to return home. Nazir Master, a 50-year-old schoolteacher from Jawan Nagar who hid in his rooftop bathroom during the attack, says: “How can I go home when I saw my Hindu neighbors–students that I myself had taught–raping and killing our village girls?” When the relief money dries up, these families will have little choice but to move deeper into all-Muslim ghettos. Says Rahim Jusubh, a 35-year-old cigarette vendor whose shop was razed: “The government hasn’t given us any security, so what can we do?”

The answer, for many Muslims across India, has been to cling more tightly to their religious identity. Mosques are starting to overflow, and the new faces are mostly young Muslims like Mohammed Asfaz. A handsome 30-year-old wearing blue jeans and a closely cropped black beard, Asfaz emerges from early-morning prayers in the magnificent white marble Bandra Mosque in Mumbai. “Ten years ago, this place was only half full,” says Asfaz, who himself began returning to the mosque last year. “Now it’s so crowded that we have hundreds of people praying on the terraces.”

The embrace of religion has been accompanied by a reinvigoration of Islamic religious schools, or madrasas. The numbers are not big–there are about 100,000 madrasa students throughout India–but their tradition-bound mullahs have a pervasive influence on Muslim social affairs. The madrasas, an estimated 90 percent of which are funded by Saudi oil money, teach a conservative brand of Islam–and none more so than Darul Uloom, a school in the town of Deoband, 160 kilometers east of New Delhi.

Darul Uloom was founded in 1866 as a way to save Islamic culture from the onslaught of British imperialism, and it sees a similar role for itself today. This time, its main antagonist is not so much Hindu radicalism as Western-style modernism. The school’s 3,500 pupils, all boys in white robes and skullcaps, are not allowed to use radios, televisions, newspapers–or even chairs. The Deobandi mullahs, however, are careful to distinguish themselves from their most famous adherents–the leaders of Afghanistan’s Taliban. “We are not a breeding ground for terrorists,” insists Marghboor Rahman, the school’s 83-year-old vice chancellor, adding provocatively: “The real cause of terrorism is the United States itself.”

The rising influence of conservative mullahs frightens secular Muslims. “Madrasas are the anchor of the Muslim community, but they are a millstone around the neck of the nation,” says Naqvi, the Delhi intellectual. Shabana Azmi, a Muslim actress and member of Parliament, says, “The battle today is not between Hindus and Muslims. It is between the moderate, sane voice of Muslims and the fundamentalist, rabid voice.” When Syed Ahmad Bukhari, the imam of the Jama Masjid in New Delhi, encouraged Indian Muslims to join the jihad in Afghanistan last fall, Azmi retorted publicly that Bukhari should be airdropped into Kandahar to wage the jihad himself.

The high-profile economic progress being made in certain sectors in India–notably IT–is pushing many Muslims to confront the dangers of being left behind–and the failures of their own community. Indeed, some critics say India’s Muslims have focused too much on grievances and too little on achievement. The school-enrollment rate for Muslims is a full 10 percent lower than for Hindus, a fact that explains why literacy among Muslim males lags behind Hindu males by more than 6 percent. And this feeds a cycle of underachievement.

But there are some pockets of hope. In Aurangabad, a city in Maharashtra state, a cluster of 15 private colleges has attracted a new generation of Muslim students, more than half of them women, and they are starting to rise to the top in statewide exams. In Hyderabad, a fast-growing southern city, 30 percent of the students pursuing M.B.A.s at the Global Business Center are Muslim women. One of them, 23-year-old Saleha Firdous, wears a traditional hejab head covering, but she is determined to pursue a career–and her husband supports her. “In my community, I’m very much the exception rather than the rule,” she says. But in these dark times, exceptions like Firdous are lighting the path toward a more inclusive and harmonious India. For in the end, it is economic empowerment above all else that will give Muslims a stake in India’s future.