Sapa  Istanbul is a melange of the contemporary and traditional. Districts like Nisantasi and the chic residential areas on the Bosporus have a modern, Mediterranean flair.

But when tourists visit the Grand Bazaar in Beyazit, on the European side of the strait, they are transported into a tale of 1,001 nights.

Bazaar merchants hawk their wares as they have for centuries, porters pull carts piled with costly carpets and leather jackets through the throngs, and tea boys scurry from shop to shop serving black tea and sweet mocha to customers.

Foreigners stroll agog through the maze of narrow streets, gaping at the painted domes covering the bazaar, built in 1461 by Sultan Mehmet II, the conqueror of Constantinople.

"The bazaar is a nearly 550-year-old shopping centre," noted Suleyman Ertas, General Secretary of Istanbul's Bazaar Association. "It has about 3,500 shops, 64 streets and 22 entrance gates."

Ertas has a shop himself. For five generations, his family has been selling woven cotton textiles like the bath towels used in the hamam, the traditional Turkish bath.

"My great-great-grandfather started the business. I was the only son who could take over the shop," he said. A rheumatologist by training, Ertas prefers the bazaar to hospital work.

"There are a lot of doctors in this country, but there are not too many businesses like mine," he said.

He would like to retire soon and let his daughter and son carry on the business. His daughter already has a small shop in the bazaar selling towels as well as candles and soaps. Almost anything can be bought at Kapali Carsi, as the bazaar is called in Turkish: gold and silver jewelry, carpets, leather jackets, clothing, shoes, towels, porcelain, water pipes, brass plates, lamps, antiques, tiles, purses, tea and confectionery.

There are also banks, money exchange offices, restaurants, cafes, tearooms, a police station, post office, fountains and doctors.

"You can get anything here except cars and things like washing machines, refrigerators and kitchen stoves," Ertas said.

In keeping with tradition, merchants tend to be grouped according to their products in the bazaar's various streets. Kalpakcilar and Terzibasi streets, for example, glitter with one jewelry shop after another.

Jeweller Ilhani's family has been selling gold jewelry for 45 years. "The advantage of having a shop in the bazaar is that you get both domestic and foreign customers," he said, adding however, that business had taken a turn for the worse.

"Fifteen years ago, Turks and tourists bought a lot of gold jewelry. Today they buy mainly trinkets. It's the economy," Ilhani said, shrugging his shoulders.

Celal, a carpet merchant, agreed that the shops used to do better. "Our best customers were Germans, Swiss and Austrians," he said. "Selling is hard now, though. There's simply no money."

Consequently, there is more haggling over prices. A lot of travel guides say bargaining at the bazaar is a must.

They usually recommend starting at a third of the stated price, with the aim of settling at half. This tactic works with some merchants, but not with Celal.

"I might give a discount of 10 percent, but not 50 percent or so," he said.

Ertas is even tougher. "I've got regular customers and fixed prices," he said. "I might ask 100 liras for something that actually costs 102, but that's it."