The traumatized but resilient people of New Orleans watched the skies warily yesterday as the first hurricane of the season gathered strength over the Gulf of Mexico, just when the city was preparing to celebrate its revival a year after Hurricane Katrina.

Ernesto, the fifth tropical storm of the Atlantic season, had strengthened into a hurricane for about 10 hours, but weakened back into a tropical storm by late afternoon with top sustained winds of 60 mph, the National Hurricane Center said. Forecasts had said it could grow to category three by the time it reached the middle of the Gulf. The storm bore down on Haiti and appeared likely to hit the west coast of Florida on Thursday. A hurricane watch was issued yesterday for the Florida Keys, and Governor Bush ordered a state of emergency.

But despite reassurances that New Orleans would be spared this time, anxiety levels in the city rose noticeably.

Katrina, the most destructive of last year’s record 15 hurricanes, was at category three when it hit Louisiana on August 29, bringing devastation to the Gulf coast and claiming more than 1,500 lives in America’s costliest natural disaster.

Officials responsible for repairing the 220 miles of flood protection that failed so catastrophically when it hit, issued a warning that, despite a year of urgent rebuilding, it was not known whether the strengthened barriers could withstand a hurricane with heavy storm surge. Lieutenant General Carl Strock of the army corps of engineers said it would be several more years before the city had “the true level of protection” that it needed.

More than $6 billion has been allocated to reinforcing the levee system, but no part has yet been brought up to the desired 100-year flood protection standard.

Governor Blanco of Louisiana said the entire coast was on alert and that mandatory evacuation orders would be issued should Ernesto pose a threat. Referring to the levees, she said: “People are having a hard time trusting what we once trusted. It is impossible to rest easy.”

Scores of events have been planned to mark the anniversary of the storm that submerged 80% of the city and wiped entire communities from the map. Everything from remembrance services and memorial dedications to a jazz funeral requiem march and lavish benefit concert featuring Wynton Marsalis and Stevie Wonder has been organized. Some events have been criticized for bordering on the festive. A fireworks display was scrapped after complaints.

In many respects, the city is getting back on its feet. Tourists, albeit in smaller numbers, have returned to the noisy bars and daiquiri stalls of the French Quarter, which escaped largely unscathed. Much of the center has been repaired and the Superdome, the emergency shelter where more than 20,000 storm victims endured a week of squalor, is due to reopen next month. But behind the freshly painted facades and the bustle of construction, much of the progress remains faltering. As well as residual anger about the levee failures, frustration is mounting at the delay in distributing billions of dollars in rebuilding money to residents.

The population of the city has halved to around 230,000 since Katrina. Many poorer inhabitants have settled in Texas, Georgia, and even distant Utah, where they say they have been made more welcome than they ever were in socially divided New Orleans.

Others remain too scarred by their experiences to contemplate returning or simply have nothing to go back to. The number of houses for sale has risen by 25% and the workforce has shrunk, with many unskilled workers unable to afford rocketing rents.

Those who have made it back, or who chose to stay, experience a city of extremes, where rotting debris borders newly landscaped lawns. Restaurants proclaim “Now open!” but cannot recruit enough staff to wash the dishes.

Levels of violent crime are high — the murder rate remains the same despite the smaller population — and health-care facilities are stretched to breaking point. Death rates are up, as is incidence of suicide, drinking, drug-taking, and even high blood pressure, doctors say.

Some also detect a broken spirit. “People are suffering,” Pastor Willie Walker of the Noah’s Ark Baptist Missionary Church in Central City said.

Pastor Walker, 40, who spent a week rescuing hundreds of victims from roof tops, passing scores of bloated bodies in the stagnant water, and at one time teaming up with the actor Sean Penn, said he saw the same lack of coordination in the recovery process as during the chaotic aftermath of the storm.

“I don’t think we should even be marking the anniversary,” he said. “To me Katrina is still here.”