By Rasha Elass, DAMASCUS (Reuters) – For generations, Lebanese shoppers have journeyed to neighboring Syria to stock their larders and buy clothes and even furniture at bargain prices.But many have stayed at home since the assassination of Lebanon’s former Prime Minister Rafik al-Hariri last February put a chill on once-cosy relations between the two countries."I used to buy everything from Syria. My wife and daughters would head up there every couple of weeks to buy food, clothes, washing powder because it is less than half the price," said Hassan, a Lebanese driver with seven children living at home.

"We haven’t been since Hariri’s death because we heard that they have been insulting and humiliating the Lebanese. I am too scared to let my family go but it is really costing us. We cannot afford to have all the stuff we have been used to." With tensions between Syria and Lebanon at an all-time high, especially since a United Nations inquiry implicated top Syrian officials in Hariri’s murder, Syrian merchants are suffering.

"On Saturdays and Sundays (the Lebanese) used to come in groups and we benefited a lot, but now business is 40 percent of what it used to be," said a manager at clothing chain Magilla.

Prices in socialist Syria — where many industries are subsidized — are a fraction of those across the border, where the bill at a posh Beirut restaurant can surpass the typical monthly salary of a Syrian state employee.

Poorer Lebanese long headed to Syria to stock up on oil, grain or detergents sold for less than half their price at home.

Syria is also known for textiles and Lebanese flocked to its covered bazaars for linen, tablecloths and underwear. Syrian-made wedding dresses were a hit with Lebanese brides, who faced paying thousands of dollars for a rented gown in Beirut.

BAD FOR BUSINESS

With detailed statistics lacking, it is hard to measure the cost of souring political ties to the Syrian and Lebanese economies, but traders on both sides are feeling the pinch.

In 2004, Syria was the third biggest market for Lebanese exports, mainly cement, paper products and packaging. Lebanon imports livestock, petrol, metal and chemicals from Syria.

Lebanese merchants exporting goods to Iraq — Lebanon’s top export destination in 2004 — Turkey and the Gulf, say they are hostage to politics as their only land route is through Syria. The border with Lebanon’s other neighbor, Israel, is closed because they are officially at war.

In summer 2005, Syria showed how difficult it could make life for Lebanon by delaying hundreds of Lebanese trucks at the border for weeks during a low point in diplomatic relations.

"They miss us like we miss them," said Nabil Sukkar, managing director of the Syrian Consulting Bureau for Development and Investment. "Politics aside, there are benefits to both countries — it’s mutual — when the dust settles we’ll get back to the mutually beneficial relationship."

NO LONGER WELCOME

Few Lebanese can report bad experiences themselves, but most have heard that they are just not welcome in Syria any more.

Many Lebanese used to hire shared taxis for the two-hour drive from Beirut to Damascus for $10, but they no longer even visit the Muslim shrines that once attracted many pilgrims.

The Syrian Tourism Ministry says the number of tourists visiting Syria rose 12 percent in 2005, but the number of Lebanese was down 25 percent on the previous year.

"We used to visit Sit Zeinab on religious holidays but I was too scared to go this year because we heard they were making life hard for Lebanese," said Amal Naser, a cleaner.

"We used to go as a group, stay at a hotel, dine, shop and still come home with cash in our pockets. We used to stock up on everything there. Now we have to pay. No one can afford it."

Syrians have shied away from Lebanon too, fearing an icy welcome as many Lebanese blame Damascus for Hariri’s death and resent years of Syrian political and economic domination.

Hundreds of thousands of Syrian workers once provided cheap labor on Lebanese building sites. They were attacked after Hariri’s death, which sparked protests in Beirut and forced Syria to end its 29-year military presence in Lebanon in April.

Skilled Lebanese recruited by Syrian firms as the economy began to open up in the past five years were also squeezed out.

"I didn’t go at all this year except for a funeral because I don’t want to hear anyone cursing at me," said a 44-year-old Syrian engineer who used to visit family in Beirut every month.

"Nothing happened … but I just don’t want to be in Lebanon right now. I didn’t even attend my cousin’s wedding."

But it is not all bad. Some Syrians say business has picked up since wealthy Syrians gave up Beirut’s designer boutiques.

"My clients used to shop in Beirut for evening gowns but now they come to me," said tailor Nazir Ghanem.

(Additional reporting by Lin Noueihed in Beirut)