I first met Abu Ali at the end of February 2012, both of us standing in an alleyway in Damascus, his car still running nearby. I was in Syria on a civilian visa, and trying to hitch a lift to his home town Homs, 160km north of the capital. The Syrian army had by then been shelling rebel-held areas of Homs for three weeks and, like many, he was more focused on the humanitarian cost of conflict than its politics.

Abu Ali is part of what is commonly referred to as Syria's moderate opposition, though moderate is a relative term. He opposes President Bashar al-Assad but thinks that arming the revolt was a mistake; he will allow that people have a right to self-defence. He wasn't able to help me then (I found another way), but we have stayed in touch. This July, he told me that at least 1,600 of his personal contacts, friends and relatives had been killed or kidnapped in the past two and a half years. "Our feelings have died," he said.

Late last month, we met again in Damascus. This time, I wanted to get to Homs with him, to find out what life was now like in Syria's third city. Once home to a million people, in the early days of the conflict it was dubbed "the capital of the Syria revolution", but no one calls it that any more. Today, like much of the rest of the country, its citizens find themselves stuck in a vicious stalemate: regime forces move around the city, while many towns and villages in the surrounding countryside are in the hands of the rebels. Within Homs, the conflict has fired up long-dormant rivalries between Sunni Muslims (the overwhelming majority of Syrians) and the Alawite Muslim minority (many of whom are loyal to the ruling regime). Last week, UN inspectors began destroying Assad's chemical weapons, but death by poison gas is not an over-arching concern for ordinary Syrians. Many more are being killed by simple bombs and bullets.

Abu Ali at his home in an opposition area of Homs called Shammas; ­behind him is a bullet hole. Photograph: James Harkin for the Guardian

Abu Ali is a small man who treads carefully, head and shoulders bowed forward, like a pilgrim going quietly about his business. In Damascus, he leads me through the winding alleys of the city's Christian area, formulating an itinerary as we go. He has a peculiar gait; he suffers from slipped discs, the likely result of vigorous interrogation on an instrument called the German chair while serving a 12-year sentence in Sednaya, one of the country's most notorious prisons. He was jailed in the late 1980s for his involvement in a long-defunct underground communist organisation. On our way to lunch, we make a pit stop at the house of a young friend of his. The younger man lies face down on a bed and Abu Ali fits a chair into his back to demonstrate the technique; the hands and feet are tied to the seat, and the back adjusted to cause severe stress to the spine. Thirty-six of his prison colleagues are veterans of this procedure, he says, and all complain of the same problem.

Over a lunch of grilled meat and salad in a high-ceilinged restaurant popular with Christian supporters of the regime, we talk about Homs. (Not just Homs: during a lull in conversation, he points to a lavish salad and instructs me to "eat that, good for sex", and chuckles quietly.) Like everyone else, Abu Ali says, his two grown-up children are struggling for money: prices have risen three-fold in two years, and few people except government workers still have jobs. Before the conflict, he had work in the solar power industry but this has largely stalled; his solar contraptions come in useful only at home, during electricity blackouts.

He now spends much of his time helping some of the many hundreds of thousands of people displaced by the heavy shelling of rebel areas of Homs and the rest of the country. He manages a project for 600 families moved from rural Hama province and the city of Aleppo to a village west of the city; this involves everything from fundraising to sourcing blankets. He bemoaned the price of milk and the lack of money spent on education; there is huge pressure on schools in the safer areas of the city, and too few schoolbooks. Then there is the strong risk of being hit by a stray mortar or bullet. On 28 May, his nephew Hamza, a 20-year-old student at the city's Ba'ath University, was out shopping with his young fiancee in a pro-regime area when they were hit by rockets fired by rebels. Both were killed instantly.

Getting at the truth about the Syrian conflict is not easy. Journalist visas from the government are rare, and travel beyond a few square kilometres of central Damascus requires permission from the ministry of information and the accompaniment of a government minder. Western journalists are often limited to a choice between atmospheric street detail or doleful prison interviews with stressed jihadis; what's harder to capture is a range of Syrians speaking freely about what they want. (In rebel-held northern Syria, the rise in criminality and the presence of al-Qaida-like groups makes reporting even more difficult.) Abu Ali had no wish to get into trouble with the authorities, but if I got the OK from the ministry, he said, he'd host me in Homs. A few days later, with my visa running out (and without telling him I was coming), I simply got on a bus.

This is one of the best ways to get to know ordinary Syrians. With no choice but to talk, and no one official looking over their shoulder, many are happy to practise their English by speaking to the stranger on the adjoining seat. The drawback is that this is a perilous way to travel: one bus at the depot in Damascus has a bullet hole in every window. My seatmate on this bus is especially anxious. A boy of 17 from a village near Hama, 40km north of Homs, he is making his first unaccompanied trip home after enrolling at Damascus University. Three days earlier, his friend was injured by a stray sniper bullet on this same route; it might have been the rebels, but no one really knows. He points to the seat where his friend was hit; he says only pride prevents him from lying on the floor for the entire journey.

A street market in Karm al-Shami, central Homs, last month. Photograph: James Harkin for the Guardian

In any case, the boy is no fan of the regime. His uncle was arrested 18 months ago and hasn't been heard of since; the family suspect he is dead. The people in his village have come to hate the rebels, too, he says. "People are so, so bored with them. They come and blow up checkpoints outside towns and run away, then militias arrive and steal everything we have. They would steal even this," he says, pointing to my plastic cup. A poor woman from a nearby village had her only cow stolen by pro-regime militias; when a group of locals asked them to give it back, they told her it had said bad things about the president. Hama, long associated with anti-regime activity, is now very quiet, he says; there are so many soldiers there that oppositionists have learned to keep their mouths shut. "The revolutionaries now accuse Hama of betrayal," the boy says. He is circumspect about his political beliefs even among his new university friends, because many might support the regime. "When I'm around them, I say I love the president, that the terrorists should be punished."

Homs has been described in the west as a city under siege. This, I discover when Abu Ali drives me around it, is no longer the whole story. There are still enclaves under armed rebel control, including parts of the old city, where about 3,000 people are cut off from food and electricity, and living in appalling conditions. Elsewhere, the city is returning to a kind of nervy normality. Abu Ali explains that Homs divides into three areas: the rebel enclaves; pro-regime strongholds, often with large communities of Alawites; and areas with pro-opposition sympathies, such as the one where he lives, which are also tentatively controlled by the regime. In both these areas, the government subsidises the price of bread, and fresh food is plentiful, but prices have risen steeply and no one has the money to buy much. Abu Ali says the rebels had been smuggling food and drink into some areas through underground tunnels, but these were discovered and exploded by regime forces. It seems likely that these rebel strongholds will eventually fall to the regime, as Baba Amr did before them – this is the area of Homs where journalists Marie Colvin and Rémi Ochlik were killed in February 2012. On our trip around the city, we drive past Baba Amr; while a few people have returned, it remains a shattered ruin and a warning from the regime to the rebels.

We pass through a checkpoint run by pro-regime paramilitaries, known by the oppositionists as shabiha, or ghosts. At one point he dashes out of the car to collect something and returns triumphant, having just been handed some money from a passerby to give to his refugees.

The row of shops where French journalist Gilles Jacquier was killed; it is close to the site where Abu Ali’s nephew and his fiancee were killed by rebel rockets in May this year. Photograph: James Harkin for the Guardian

We drop in on Amjad, a wiry fellow oppositionist who now considers both sides as bad as each other. "When we watch CNN, France 24, even the BBC," he says, "I don't think they are talking about Homs. It is lies." The regime certainly bombs buildings, he says, and it sometimes makes mistakes, but often it's because those buildings are being used as barracks by armed groups. "We are lost between shabiha and debaha," he sighs, using the Arabic word for slaughterers to refer to the rise of puritanical, sectarian Islamism among the rebels. Amjad's brother, a 60-year-old taxi driver, was kidnapped on 4 May. There has been no demand for money or any other obvious motive; the family have not heard from him since.

Such kidnappings are rife. Some are for military reasons, Abu Ali says, others are motivated by money or religion; sometimes, it's all three. One of his former teachers, a rich artist and a very old man, was recently kidnapped by shabiha who want 24m Syrian pounds (about £100,000) for his release; he hopes to hear from the kidnappers in the next day or two.

Then there is Tariq, an Alawite recently kidnapped for largely sectarian reasons; armed rebels (what Abu Ali calls "revolution shabiha") are demanding the release of government detainees in exchange for his return.

On our way back to the car, Abu Ali points out the spot where his nephew and his fiancee were killed. Nearby is the row of shops where French journalist Gilles Jacquier was killed in similar circumstances in January 2012. Jacquier's wife has written a book blaming the regime for the death, but Abu Ali, based on the geography and the pattern of attacks, dismisses this theory. He takes me to the abandoned tenement from which he believes the rocket was fired by anti-regime forces.

We head to an opposition area of the city, home almost exclusively to Sunni Muslims, for tea with some of Abu Ali's acquaintances. One is from the ruined Baba Amr district, and has twice been forced to leave his home when the army entered to rout the rebels. He won't talk to a journalist, he says, and sits clutching prayer beads. In any case, he adds, talking about it only makes him cry, and he has a problem with his corneas that means he can't let himself shed any tears. On the verge of crying, he changes the subject. Syrians are an optimistic people, he wants me to know, with 7,000 years of civilisation behind them; some of his best friends are Alawites and Christians, friendships born of coincidence, not religion. "No one should have to see the things I've seen," is all he will say about Baba Amr. He stares out of the window like a blind man.

Abu Ali is of a generation for whom picking apart Syria's complex mosaic of religions and ethnicities remains a tasteless and unpatriotic business. As a result, he has never told me directly that he is an Alawite Muslim himself. This fact might make it easier for him to pass through some regime checkpoints, but it also poses certain risks. After our tour of the city, he drives me back to the home he shares with his wife in an opposition area called Shammas. It is on the sixth floor of a tenement block and only 800m from Baba Amr; like many homes in the area, there is a crack or crevice from a stray bullet in almost every room. Things aren't as bad as they were, he says, but sometimes he and his wife can't sleep for the noise of the mortars passing overhead and crashing into the ground.

Amjad, who used to live here, joins us for the ride. He, too, is an Alawite Muslim, and he moved from Shammas to Akrama because he was afraid that his daughters might attract insults in the street because of their religion: "Just from young people, looking for revenge." Shammas, a formerly mixed neighbourhood, is slowly being drained of its Alawites; Abu Ali is one of the few who remains. "He believes he is safe here," Amjad ribs him; it is clear he doesn't have the same confidence. For his part, Abu Ali says he has been stopped at several rebel checkpoints and never had any problems; then again, he is well known in the area, so his experience might not be representative. When he was ordered to leave by one armed group, another stepped in to guarantee his safety.

Beyond the bombs and the bullets, it is this creeping sectarian migration that represents the most ominous threat to Homs, and to Syria as a whole. Earlier that day, we discover, a Syrian army missile destroyed a building in a very densely populated area of the city, al-Waer, just a few kilometres away. Five hundred thousand people now live in al-Waer; half are recent arrivals, sent from other areas of the city as they have come under the control of armed rebels. Just about everyone there is a Sunni Muslim and the area is not fully under regime control. It is a no-go area even for Abu Ali. Conditions are poor; everyone has a home and bread to eat, but it is seriously overcrowded and some of the tenement blocks remain unfinished, without windows or doors. The regime relies on fortified military positions directly surrounding the area to keep an eye on residents, neutralising threats with rockets or snipers; it sounds like an open prison.

On a previous visit to Homs, I had met a young man who had been moved to al-Waer from a rebel enclave. We stayed in touch, and over the last few years his aspirations have shifted from getting a good job and a girlfriend to a growing sympathy with the extreme Islamism of the rebel group Jabhat al-Nusra. He's studying engineering at the city's Ba'ath University, but the checkpoints on the way there and back put the fear of God into him; the shabiha, he feels, can do what they like. A week before I travelled to Syria, and having refused all my previous offers to send a little cash, he had tentatively asked for money for his family: it struck me as a sign of growing desperation. "Life is hard but we continue to live," he wrote. "Here in Homs, all Sunni people want to leave to a safer place." He signed off: "See you after victory."

In the evening, while his wife and I eat grapes and watch a popular Syrian crooner on television, Abu Ali sits in his pyjamas at his desk behind us, doing his accounts, catching up with friends on Facebook and Skype, making a few phone calls to try to find a lawyer for someone in prison. In passing, I see the figure of 120,000 he has written on a sheet of paper; this, it turns out, is someone's best guess at the number of people now being held in regime jails. I ask if there has been any news on his former teacher. The gang who kidnapped him have been persuaded to drop their ransom from 24m Syrian pounds to 3m, he says. Like most of the work Abu Ali does, it's progress of sorts, but still a long way from good news.