There is something mysterious and unaccountable about Trieste, a certain kind of vivid ghostliness that has struck many visitors to the cosmopolitan Adriatic port.

For a start, it is not really an Italian city at all, although Italian is the language you hear spoken on the streets. There is none of the noise, movement and colour you’d associate with Italian cities, in the north and south, none of the vibrant pavement nightlife - I was in Trieste, for instance, on the night of the European Cup final between Real Madrid and Valencia, and I missed the first 20 minutes because I couldn’t find a bar showing the game (I ended up in a kitsch Irish pub).

Rather, what strikes you about Trieste is a kind of lingering melancholy, for this is a city haunted by its past, as Austro- Hungary’s strategic gateway to the Mediterranean, and by Irredentist struggles and wars of liberation and oppression.

Trieste is one of those city-ports, like Odessa or Gdansk, which ought to belong to no country; indeed there was an attempt after the Second World War to create the “Free Territory of Trieste”, a strategic nowhere zone between East and West, a space for watchfulness and spies and black- marketeering.

Before Trieste was ceded permanently to Italy in 1954, what was known as Zone B of the Free Territory of Trieste was assigned to Yugoslavia; and there are Triestines, some of whom I met on my visit, who still mourn - rather like those haunted Germans expelled from their East Prussian homes after the war - the lost towns of Koper, Piran, Umag and Novigrad which are now divided between Slovenia and Croatia.

Jan Morris, who is writing a book provisionally entitled Trieste and the Meaning of Nowhere, served as a soldier in the divided city after the war and still returns there as often as possible. She recalls during the Cold War, the strange excitement of Trieste, with its massed ranks of American and British troops and with the “Iron Curtain being only a couple of miles away and all these people gathering on the border to trade illegally in things like jeans”.

What attracts Morris to Trieste is exactly what attracted me: the sense that when you are there you have reached the end of something, that you are in the last town in western Europe, a town surrounded by water and hills that seems somehow untouched by the homogenising effect of modernity. (I was relieved to find no McDonald’s or Burger King or Starbucks.)

Trieste overlooks the northernmost shores of the Adriatic Sea, and viewed from the surrounding hills, the city itself, with its tall, red-roofed buildings and narrow arterial roads, seems to be pushed to the very edge of the sea by the Carso - the plateau of woods and rocks that rises behind and acts as its ramparts. In winter, the “Bora”, a fierce east-north- east wind, sweeps down from the Carso through the city and out to the Gulf, with gusts sometimes reaching 100mph. As Riccardo Illy, mayor of the city, says, “The Bora is both loved and feared by the Triestini.”

When the Bora has gone, a peculiar stillness settles over Trieste. “I like melancholy places,” Jan Morris tells me, “and Trieste has a special melancholy all of its own, particularly in winter. I like the presence of the sea, the low hills, and when the Bora blows, it leaves behind this strange sense of unfulfilment in the air.”

It’s perhaps no surprise, then, that James Joyce wrote his great short story of unfulfilment, “The Dead”, with its marvellous closing image of the whole of Ireland disappearing beneath a blanket of falling snow, during the 11 years that he lived in Trieste; and Rilke wrote the Dunio Elegies when he was living in a village just outside the city. Trieste, you can’t help but feel, inspires that kind of concentrated, melancholic rapture.

But there is another side to Trieste, if you care to look for it, a rougher, more boisterous side as befits a working port. In Finnegans Wake, Joyce has his own name for Trieste - “Europiccola” - a little Europe, and the city through which he moved as an impoverished teacher of languages was certainly alive with the clamour of Italians, Magyars, Croats, Slovenes, Serbs, Germans, Austrians, Jews, Armenians, Greeks and Czechs, with the heterogeneous peoples of the old Austro-Hungarian empire. Today, the city is quieter, a place of long shadows and sombre piazzas; but it still has a cosmopolitan swagger, with strong Slavic, Teutonic and Latin influences. (The story may be apocryphal, but it is often said that only 10 per cent of the names in the local phone book are Italian, and that more than two-thirds of Triestines have a non-Italian grandparent.)

Architecturally, Trieste has the feel and look of a central European city, with its splendid neoclassical and baroque buildings, most notably the Palazzo Pitteri by Ulderico Moro (1790). Indeed, many of the locals refer to it as their “little Vienna or Budapest”. As a city renowned for religious tolerance, there are some wonderful churches, of all faiths and denominations, my favourites being the neoclassical Catholic church of Sant’ Antonio Nuovo situated at the end of the Grand Canale, and the neo-Byzantine Serb-Orthodox church of S Spirdione, with its pale blue imitation oriental domes and wonderful mosaics by Guiseppe Bertini.

It is only when you are in rare and special places like Trieste, where East meets West, that you begin to understand more fully the conflicts in the Balkans, and how south-east Europe seems forever doomed to be split along the ancient fault line separating Catholic from Orthodox, Rome from Byzantium. It is estimated that as many 6,000 Serbs live in Trieste, and so, perhaps, it’s no surprise to find anti-Nato graffiti, written in English, splattered in yellow paint across walls and buildings. Perhaps it’s wrong to blame the local Serbs: the war was never popular in a city where the population is so ethnically mixed.

That population is an ageing one, so there is none of the youthful exuberance of, say, the Slovene capital of Ljubljana, which is just a 90-minute drive away and has an average age of 25. So you would be foolish to come to Trieste in search of nightlife; in fact, I was in the city three days before I found a decent bar, tucked away in the maze of streets in the old Roman district, with loud music and young people. But even then, the hard dance beat of techno appeared incongruous - how could there be so much life in a city seemingly dedicated to dying?

James Joyce arrived in Trieste in October 1904, leaving in 1915, a period when the labyrinthine Austro-Hungarian empire was unravelling, its disparate peoples inflamed by incipient nationalism. Everyone, it seemed, was in revolt against the long-nurtured assimilationist, multinational ideals of Franz Joseph, emperor of Austria since 1848 and king of Hungary since 1867. Joyce’s Trieste, as revealed by John McCourt in his new book James Joyce: a passionate exile (Orion Media, pounds 16.99) was a cosmopolitan centre of fashion, music and languages, where the Grand Canale was filled with merchant ships unloading their cargo (today, the Canale is occupied only by small fishing boats).

In particular, Joyce was fascinated by the Babel of languages he heard in the streets, and this experience informed his work in fresh and imaginatively unexpected ways. “Later,” McCourt writes, “when writing his own encyclopedia of world culture in Finnegans Wake, Joyce would create an international portmanteau language, rooted in English but brimming with different traditions, in which few individual words could be safely reduced to one single, authoritative meaning. In this respect, the language of Finnegans Wake is like an exaggerated, exploded version of Triestino, that rich, composite dialect which Joyce listened to with rapt attention and learned to speak brilliantly.”

Are the streets of Trieste still raucously Joycean? Not really. Authentic cafe life still exists, where you can eat the mixed Italian, Slavic and Austrian cuisine; but today, above all else, a sense of time past and time passing impresses itself on any visitor, as it does in a similar way in Lisbon, that other ghostly seafaring city more rooted in past than present.

As you walk the streets of Trieste you can sense the quiet resignation of the people. There is no urgency. No one seems to hurry. Why, they even drive slowly in Trieste. And when the sun shines, the old women and men along the seafront don’t so much walk as lumber along, stepping over the lines along which trams once ran, in a period when the city was busier, more purposeful.

Everywhere you look, too, in the splendour of some of the 18th- century buildings, in the rotten jetties of the port and in the faded elegance of the waterfront buildings, you are reminded of something great, of when the city served as an empire’s vibrant port, sending ships out to the Orient.

And everywhere you go, you are never far away from the long melancholy roar of the withdrawing sea. Yet the Triestines seem reluctant to leave their haunted city. Instead, they prefer to stay on, boats against the current, borne back ceaselessly into the past.