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The crowd emits a loud cheer as two musicians climb onto the small stage at the front of the tackily furnished cruise boat. Tonight will be special, the keyboardist, a beefy young man in a pink Abercrombie and Fitch T-shirt, promises, but first everyone must turn off their cameras.

The audience instinctively understands why and complies. It's a signal that the laws of the Islamic Republic of Iran are about to be bent, if not outright broken. Nobody wants there to be evidence of what happens next.

For 2½ hours, the two-man band does a reasonable impersonation of an Iranian Hall and Oates, strutting and sweating and pounding on the synthesizer through a selection of Persian pop tunes, including songs from the days before the Islamic revolution. As the duo sing, the delighted crowd of perhaps 200 people gyrate wildly in their seats, and occasionally right into their neighbours' chairs, cheering madly as though the cheesy dinner cruise were a musical event equivalent to Woodstock.

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Men disappear to the toilets and come back walking a little tipsier, amid rumours that illegal alcohol is available on board. Laughing women throw their arms around each other and let their obligatory head scarves slip dangerously toward the back of their heads.

Through it all, the Chinese-made catamaran spins in the dark waters of the Persian Gulf, keeping well away from the Iranian mainland before returning to its berth at Kish, a tiny island 20 kilometres away from, and just beyond the full control of, the rest of the Islamic Republic.

Twenty-nine years after the Iranian revolution brought in the tight-laced social restrictions that transformed a Western-backed monarchy into a strict Islamic republic, Kish provides a rare outlet for Iran's booming population of educated young people who are frustrated with the regime.

There is no fun in Islam, Ayatollah Ruhollah Khomaini once said. It's hard to guess what he would have thought of Kish. Live music is frowned upon in Iran, anything resembling a discothèque is banned outright. Alcohol is completely illegal, as is the mingling of unmarried members of the opposite sex. But in this one corner of Iran, it's as if the Islamic revolution never completely took hold.

"Kish is the best place in Iran. You can feel the air on your head and breathe more easily here," said Mani, a 21-year-old sales clerk at one of the myriad of duty-free malls that are the island's main attraction beyond the beaches. A Tehran native, her own black head scarf barely clung to the back of her head, revealing a combed-back mane of dark brown hair.

In reality, Kish is hardly sin city. Despite the occasional forbidden tipple, the island's restaurants openly serve only fruit juices, soft drinks, tea and coffee. Those who live and work here say that Kish is less freewheeling now than it was before hard-line President Mahmoud Ahmadinejad came to power in 2005. Even during the dinner boat musical performance, head scarves remain on and no one goes so far as to stand up and dance.

Nonetheless, Kish remains a place where Iranians, as many as one million of them annually, come to let their hair down - and let it show - a little bit. Ninety-two square kilometres of sandy beach and palm trees, and home to just 16,500 people, Kish is at once the Hawaii of Iran, its Las Vegas and its Hong Kong. It's only a short flight from Bushehr, the city at the centre of Iran's controversial nuclear program, but to Iranians, the island is a rare escape from their country's economic woes, turbulent politics and repressive restrictions.

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The once-obscure island shot to notoriety during the 1970s when Iran's last shah, Mohammed Reza Pahlavi, turned the backwater fishing outpost into a playground for the country's elite. A luxury hotel and a grand casino were built, as was an airport big enough to handle the shah's private Concorde jet, which legendarily would fly in planeloads of prostitutes and meals prepared at Paris restaurants.

That all changed with the Islamic revolution in 1979. It's unlikely that a Concorde jet will ever again grace the runway at Kish International Airport.

Nonetheless, Kish has got some of its groove back in recent years as Ayatollah Khomaini's successors have loosened restrictions in an effort to compete with the likes of Dubai, where tens of thousands of Iranians travel every year to indulge in duty-free shopping and a liberal nightlife. A decade ago, Kish was made both a duty-free zone and the only part of Iran that foreigners could enter without a visa approved in Tehran.

The notorious religious police that keep an eye out for improper female attire and other social no-nos in Tehran and other cities seem to be absent here. Though there are separate men's and women's beaches - and the hotel pools have sat empty of water since shortly after the revolution - this is one of the few places in Iran where sunbathing is tolerated at all. Men and women ride jet skis and tandem bicycles together, and under the cover of night some of the more adventurous women even go wading into the water with their partners, albeit while fully clothed.

"Everything is better in Kish. Even the air is different," said Arman, a slick-haired 33-year-old electrician from the eastern city of Mashhad. Arman was among hundreds of people of all ages who spent an afternoon last week at the Sea World-esque Kish Dolphinarium, a popular relaxation spot that is at once a chaste way for couples and families to pass the time, while gently pushing the limits of what's acceptable in the Islamic Republic. The 18 Ukrainian dolphins - advertised as the only ones in the Middle East - delight packed houses each day to the sultry pop of Enrique Iglesias, drawing complaints from the island's religious leaders, who thought the dolphins might be just as inspired to leap through hoops by something less lusty.

The Dolphinarium was built by Hossein Sabet, a 58-year-old Iranian businessman who has invested more than $300-million in Kish. Among his projects is the island's landmark 200-room Dariush Grand Hotel, an over-the-top tribute to the glories of ancient Persepolis and one of the rare places in Iran where payments can be made in U.S. dollars. A $2.2-billion golf resort is reportedly the next project.

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Before making his investments, Mr. Sabet is said to have received assurances from the authorities that Kish would continue to be treated differently from the rest of Iran. There's clearly a back-and-forth wrangle in the upper echelons of the Islamic Republic about just exactly what that means. A few years back, a foreigners-only beach was opened where men and women were allowed to swim together, provided they could prove they weren't Iranians. It was later closed down after the foreign flesh attracted hordes of Iranian peeping Toms.

Such restrictions clearly irritate the majority of the liberal-minded Iranians who vacation on Kish. "Men's beaches, women's beaches. It's silly, and it's not interesting for either side," said Imjad, a 65-year-old retired Justice Department employee, snorting as he passed by a sign pointing to the island's men-only beach and speaking in halting French he learned before the revolution. "We just have to hope that the rest of Iran becomes like Kish before Kish becomes like the rest of Iran."

ON THE ROAD

The road to Jerusalem: As he nears the end of his time as The Globe and Mail's Middle East correspondent, Mark MacKinnon is journeying by bus, train and taxi across the region to take stock of how seven years of the "war on terror" has affected the people who live there and what kind of Middle East the next U.S. president will inherit after George W. Bush leaves office. Mr. MacKinnon has been reporting from the region since Sept. 12, 2001. His next posting for The Globe will be Beijing.

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