After nearly six years of savage civil war during which power-mad warlords and their doped-up child soldiers ravaged the country, Liberians should be in no mood for a party. But earlier this month residents of the coastal capital, Monrovia, awakened to find their dilapidated city festooned with flowers and palm fronds. The people poured into the streets to celebrate, and some even waved Liberian flags, symbols of nationhood that had long since lost all meaning in this divided country.

Why the public elation? Peace, it seems, may have broken out. Liberians and foreign diplomats have watched with amazement for the past three weeks as an unprecedented series of events unfolded. First a cease-fire was signed in the Nigerian capital, Abuja. Two weeks later, the leaders of each of Liberia's myriad warring factions arrived in the capital to set up a new transitional government. And last week soldiers began pulling back from the tangled web of front lines crisscrossing the countryside.

U.S. special envoy Dane Smith called the breakthrough the best thing to happen in Liberia for years. "The sounds of violence will die, and the bells of peace will ring forever," rejoiced Zimbabwean politician Canaan Banana, now an observer for the Organization for African Unity. Even naturally skeptical diplomats found reason for optimism. "Everything that [the warlords] are saying, everything that they are doing, indicates a more serious approach," says John Fuhrer, U.S. charge d'affaires in Monrovia.

This is not--as anyone familiar with the country's protracted civil war will point out--the first time that a cease-fire has been signed. On 12 previous occasions efforts by West African leaders to silence the guns in Liberia have failed. As recently as last year, Ghanaian President Jerry Rawling's attempt to broker an accord led only to renewed fighting as fierce as any seen before. But this time, say diplomats, things may be different, because the Abuja accord gives every factional leader a voice in the new government, regardless of the soundness of his claim to power.

Charles Taylor, perhaps the biggest obstacle to peace in the past, set the tone for the new spirit of participation when he traveled to Monrovia this month. It was the first time the U.S.-educated warlord had entered the capital since he ignited the civil war in 1989. Swapping battle fatigues for a natty white suit, Taylor took his seat on the new transitional council and declared that the war "here and now is over." As proof of his good faith he vowed to disarm his soldiers faster than anyone else, and last week he invited peacekeepers to take positions ahead of schedule at his former headquarters 100 miles north of Monrovia. "We should act while the [situation] is hot," he told Time. "There are many windows of opportunity right now, and we need to exhaust them all."

That sense of urgency is widely shared. Alhaji Kromah, until recently one of Taylor's chief rivals, said that "not marginalizing any groups is key to this whole process." As a result, he said, "even those that didn't deserve anything [in the Abuja talks] got something." Kromah, now vice president of the transitional council, stresses that the current government is temporary. It will remain in power only until presidential elections are held next August.

Already the would-be candidates are jockeying for position. Taylor has declared his intention to run and, of course, to win. Kromah remains undecided about his candidacy, though he too claims that if he were to enter the race, victory would be assured by a "landslide." The former rebel concedes, "This is an awkward arrangement. It is intended to cater to the reality on the ground and pave the way for peace."

Well, it may be a start. But even the warlords admit that Liberia's future remains precarious. The economy, for one thing, is in ruins. Rubber plantations and iron mines, which before the war brought in more than $300 million annually in foreign exchange, have long since been looted and abandoned. Hundreds of thousands of Liberians do not have enough to eat. Aid workers recently discovered that northeast of Monrovia, in an area where 300,000 people had been cut off from supplies by fighting, more than half the children were suffering from severe malnutrition.

The economic problems will be hard to solve as long as the threat of violence remains. Some 60,000 fighters from various factions--one-quarter of them boys under 15--are still fully armed in the Liberian hinterland. Persuading them to lay down their guns will require potent incentives, namely jobs and money. To face these challenges, Liberia's erstwhile rebels say they need help. "This war-torn country cannot be expected to fire itself into space like a missile," says Taylor. "We do need a big push." So far, however, no new aid has been promised the government by foreign donors. The U.S., traditionally the biggest contributor to Liberia since the country was settled by freed slaves in the 19th century, is adopting a wait-and-see attitude. But Washington is in danger of waiting too long. If Liberia is to resurrect itself from the ashes of one of the continent's bloodiest conflicts, it will take more than the good words of a few fighting men.

--Reported by Kirk Troy/Monrovia