Odette and Elie MorenoFifty years ago, women in Alexandria strolled to the beach in their bikinis (above, sunbathers at Sidi Bishr beach in 1959)

Colette Frege Haggar remembers how, in the 1960s, she would slip on a bikini and walk down Alexandria’s streets to join the other bikini-clad women at her local beach.

Now, women in this Egyptian city almost universally wear head coverings—and increasingly, Ms. Frege and others say, they wear niqabs, the black shroud-like garments with slits for the eyes. If women go to a public beach, they usually do so in head-to-toe dress. Below, a group of girls wearing the khimar, a more conservative form of veiled covering, along Alexandria’s waterfront.

Ms. Frege, a 56-year-old Catholic of Lebanese-Italian descent, has watched her city morph from the Middle East’s most cosmopolitan city to one of its Islamist strongholds. The question is what comes next: a return to the more liberal polity of her youth or a fundamentalist entrenchment.

As Egypt’s provisional military government sets about defining the country’s new political system, a core issue is which Egypt will emerge—that of the religious conservatives who became strong during Mr. Mubarak’s rule, or of the young protesters who captured international imaginations with their pursuit of free expression and political self-determination.

Both strands run through Alexandria’s recent history. Ms. Frege is among those who recall when Alexandria was known as Little Paris, home to a vast community of Europeans and Jews, described by novelist Lawrence Durrell as the city of “five races, five languages, a dozen creeds.”

Today, the vast majority of foreigners have left. Egypt’s second city is now a bastion of the country’s Muslim Brotherhood, along with Salafists, who adhere to an austere Saudi Arabian brand of Islam. Alcohol, once sold widely, has largely been relegated to hotels. Women say they wouldn’t dare wear a bikini at the beach, nor a short skirt on the city’s streets. The town is a parable for what Egypt has become in recent years: the world’s most religious nation, according to a 2009 Gallup poll.

Much of that change came during the 30-year rule of Hosni Mubarak. Paradoxically, it was under his pro-Western, secular regime—a de facto one-party state where political freedoms were limited and the state cracked down on religious extremists—that swaths of Egyptians grew more religious and some embraced a less-tolerant Islam.

Western governments have worried aloud about—and Iran has crowed over—the more Islamic shape a new Egyptian democracy might take. For the U.S., the worst-case scenario is that Islamists will take control of Egypt, seeking to replace secular laws with sharia law and linking up with their religious allies across the region.

“We will return an Islamic regime to this country, as we lived in the age of Islam,” says Mohamed Hussein Eissa, a 74-year-old Muslim Brotherhood leader in Alexandria, when asked what he would like to do if elected to power. Mr. Eissa’s view is not the official party line.

Radicalism touched Alexandria as recently as New Year’s Day, when a Christian church was bombed, killing 23. The attackers’ identity still isn’t clear. The Muslim Brotherhood condemned the attack, and its members are not suspects.

Founded by Alexander the Great, Alexandria was Egypt’s capital until the 7th century. It was famed for its library. Alexandria was little more than a village by the 19th century, when modern Egypt’s first ruler gave foreigners tax concessions and permission to set up their own courts.

The port on the Mediterranean grew into a center of trade and shipping. It attracted large populations of Europeans as well as minorities fleeing persecution or seeking opportunity—Jews from Europe and the Levant, Armenians from Turkey, Christians from Syria, Palestinians from the newly created Israel.

“The communities still live and communicate—Turks with Jews, Arabs and Copts and Syrians with Armenians and Italians and Greeks. The shudders of monetary transactions ripple through them like wind in a wheatfield,” Mr. Durrell wrote in 1958’s “Balthazar,” one of his novels set in the city. “Where else on earth will you find such a mixture?”

Wealthy citizens built elaborate villas. Men would sip aperitifs at sidewalk cafes that served food on Rosenthal china, says Sahar Hamouda, deputy director of the Alexandria and Mediterranean Research Center at Alexandria’s new library complex, built in 2002. As many as 253 newspapers were published in a range of languages.

French, not Arabic, was the language of communication. “We dressed like Europeans, we lived like Europeans, we went to European schools,” says Laila Defrawi, a Palestinian who came to Alexandria from Jerusalem in 1948 and married a wealthy Egyptian.

From the 1920s, Egypt had a taste of democracy, albeit limited by a monarchy and British occupation. There were vigorous political parties and a relatively free press, says Raymond Stock, who teaches Arabic at Drew University.

On the less cosmopolitan side of Little Paris, resentment simmered. Mr. Eissa, one of a number of Egyptians who had moved to Alexandria from the rural Nile, recalls growing anger at British rule. Many Egyptians thought of the two world wars as European affairs, resenting the resulting hardships; some supported Nazi Germany against the British.

In 1948, Egypt suffered a humiliating defeat in Israel’s War of Independence. Many blamed King Farouk. In 1952, angry crowds in Cairo set fire to European establishments. Army officers led by the pan-Arabist Gamal Abdel Nasser overthrew the king and ended British rule.

Foreigners began to flee. After the 1956 Suez crisis—when British, French and Israeli troops invaded Egypt to reassert control over the Suez canal—British and French citizens, including some Jews, were expelled. The regime’s subsequent expropriation of private businesses and the political atmosphere drove out most of the remaining foreigners, including the sizable Jewish community.

Still, Alexandria maintained its European feel. Ms. Frege says that as late as the 1970s, she and her friends sunbathed at the beach and played songs from the Beatles and James Taylor on guitars.

The mid-1970s brought rapid change. When a new president, Anwar Sadat, opened the door to free enterprise again, a mass migration began from poor rural areas. The city’s population grew from around one million in 1952 to more than four million today.

Millions of Egyptians who went to Saudi Arabia, Kuwait and other Gulf Arab states in the 1970s to profit from the booming oil economies came home, embracing Salafism and the black veil.

The Muslim Brotherhood gained a following in part by providing social and medical services to Alexandria’s poor, stepping in where the government hadn’t. Mohamed Awad, a prominent Alexandria architect, blames Mr. Mubarak’s regime for hollowing out people’s political and economic choices and opening the way for them to turn to the culture’s other organizing force.

Today, more than one-third of Alexadria’s population live in unplanned suburbs without proper utilities. Some 19% live on less than $3 per day, according to the United Nations Development Program. Of the foreign community, little remains. Most of Alexandria’s villas are gone or are overshadowed by concrete apartment blocks. The city’s Jewish community has dwindled to 10 or 11.

“Here you had a city that was resplendent because of its openness to every culture in the Mediterranean, and all that is gone,” says André Aciman, author of “Out of Egypt,” a memoir of his Alexandria boyhood.

Young lovers still stroll along the Corniche in Stanley Bay, holding hands. The girls wear head-scarves, but often brightly spangled and paired with makeup and tight jeans. Women dressed in black niqabs pass the other way, walking behind their robed husbands.

Attitudes towards cosmopolitan Alexandria differ widely among the observant Muslim majority. “We are proud of this history,” said Doaa Yunis, a 24-year-old doctor in a loose-fitting skirt and a long veil. She would welcome a more liberal society—even bikinis, if not for herself, she laughed. At a sweet shop, 32-year-old store manager Ahmed Nasr believes proselytizing Islam “rescued” the city from its cosmopolitan past and would have to step in again if it returned.

Alexandria’s new library is positioning itself as a symbol of the city’s rebirth, alongside the recently reopened 1921 Opera House, a newly formed orchestra and renovated antiquities museums. Library director Ismail Seragldin says that after a long period of decline for Alexandria, his library has lined its shelves with books including Salman Rushdie’s “Satanic Verses,” rejected by Islamists. In looting and violence that shook Alexandria on Jan. 25, the director was heartened by the reaction of local youths: They formed a ring around the library and shielded it from attack.

Ms. Frege, who works at the library, doubts women will be wearing bikinis soon. Yet she is hopeful. “I have people around me who say, ‘We finished with Mubarak and corruption, but who knows what is going to come next?'” she says. “I am not a prophet. But from what I see, people don’t want an Islamist regime.”

“If the economy flourishes and people have a good living,” she adds, “they may be less obsessive with religion and go on with their lives.”

—Tamer El-Ghobashy contributed to this article.Write to Marc Champion at marc.champion@wsj.com and Lucette Lagnado at lucette.lagnado@wsj.com