"BURY me standing," a Romanian gypsy leader once said to Isabel Fonseca, "I've been on my knees all my life."

It's an affecting remark, but not an especially characteristic one. To judge from the rest of Isabel Fonseca's fascinating account, most gypsies haven't felt on their knees: aggrieved self-pity doesn't seem to be a dominant emotion. They are standing now - they've won the right to call themselves a people and to have representatives at UN meetings of minority groups. There are Roma congresses, packed with full-time professional gypsies. Gypsy lexicographers, musicologists and historians are busy setting an oral culture in the stone of the written word. Amid the ethnic revival in Eastern Europe, where most of Europe's gypsies live, they've decided to do some reviving of their own. But unlike, say, the Croats and the Serbs, who go in for lachrymose self-dramatisation and self-indulgent martyrology, the gypsies have a masterfully present-minded attitude to sorrow, a conviction that forgetting may, after all, be the best revenge.

They have much to forget: four centuries of being sold into slavery in Romania; a history of organised indignity and persecution to rival the Jews; and, like the Jews, a holocaust. The Roma word for holocaust is porraimos, the devouring. Half a million were exterminated by the Nazis - apart from the Jews, they were the only people proscribed for purely racial reasons - yet there are no gypsy holocaust museums. They've built an identity on radical otherness, not on victimhood.

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The prejudice against them is incorrigible. It does not matter that they are among the most industrious traders, astute horse merchants and skilful metal workers in Europe: they will always be seen as shiftless and workshy. It does not matter that, among themselves, truthfulness is a cardinal virtue. To the outsider, to the gadje, they are always liars.

No gypsy, however assimilated, can ever escape the stench of these stereotypes. Even when the facts of their persecution are perfectly unavoidable, the stereotypes survive intact. During a visit to Auschwitz, when Isabel Fonseca asked why the gypsies hardly figured in the exhibits, the Polish guide sniffed and said that even here, in the death camps, they didn't bother to work. Elsewhere in Eastern Europe, gypsy encampments are routinely fire-bombed, while the police look the other way. As Fonseca discovers, the gypsies simply return to their gutted possessions and stoically, determinedly, pick up the pieces of their lives. This endurance is not especially heroic, just very tenacious. Their endurance is sustained by a culture articulated, she argues, around the idea of fate and the idea that gadje - non-gypsies - are never to be trusted. With such categories to assist them, persecution does not disillusion or disappoint. It is just the ceiling beneath which they have to live. And they do so, exuberantly.

As Fonseca shrewdly observes, one reason why the ethnic nationalist revival in eastern Europe since the end of the Cold War has made things worse for gypsies is that they actually practise the relentless community solidarity that the ethnic demagogues so ceaselessly preach. Far from being hated merely because they are the majority group's dark opposite - shiftless, dirty, and so on - they are loathed because they have kept their customs and language, their selfhood and their blithe apartness. As Fonseca puts it, "gypsies were truly communitarian" in a way that the neo-Nazi Germans who attacked them in the name of Volkisch solidarity could only fantasise about.

Yet the strength of this collective identity is puzzling. They are a people with no land and with no home except the highway. The 15 million gypsies are scattered from village India, where they are said to have originated, to the suburban lawns of Silicon Valley, California. While there is a central core of common domestic terms, gypsy dialects vary enormously, and when the new professional gypsies of the recent awakening gather for professional congresses, their national differences register more strongly than their common gypsy elements. Modern gypsy politics, as Fonseca drily reports, is ruthlessly divisive and sectarian. Sometimes, it seems as if the only identity which gypsies truly share is the common burden of the gadje stereotype.

Yet the pull of a common fate is strong, sometimes to the despair of those who want to escape. "We are all like crabs in a bucket," one of the "career gypsies" sadly confessed to Fonseca. "Every time one of us tries to climb out, the others pull him back down."

Given the force of this backward pull, given the strength of the suspicion of outsiders, it is astonishing that a gadje, and a female at that, should have penetrated many of the secret places of gypsy identity. Bury Me Standing is a genuine history of gypsy culture, building on the renaissance of gypsy scholarship and given life by the author's repeated journeys into the heartland of gypsy culture in Eastern Europe. Her most revealing sojourn - it makes up the most vivid chapter in her book - was her summer with the Dukas family in that bleakest of outposts, Tirana, capital of Albania. It was from the tough and expressive women of the Dukas family that she learned how deeply gypsy identity was built around the priority of the tribe, and its unquestioned right to define the taboos and rituals which determine individual life. She learned this mostly through exclusion: they treated her with munificent hospitality, but they wouldn't let her eat with the women; they wouldn't let her wash herself. And they could not get over how strange this gadje was. She was 30 and still unmarried and her Western body was a miracle to them:

"It was my breasts that really intrigued them, though. Without hesitation they moved straight in to inspect. They poked and cautiously squeezed..." And then took out their own - "yamlike triangular flaps" - for comparison. When the gadje brushed her teeth, the boys crowded around, imitating her with their fingers rubbing along their gums.

Fonseca never romanticises or sentimentalises, observing sardonically that among the gypsies themselves, all sentimentality is reserved for song. She keeps a beady watch against being duped. "Gypsies lie. They lie a lot - more often and more inventively than other people. Not to each other. But to gadje."

She does her best to penetrate the secrets of the language, only to realise, as one gypsy lexicographer gleefully told her, that as soon as she thought she had learned the phrase for something, the gypsies would use another.

In effect, Fonseca used the very process of her exclusion from gypsy life to map the impassable contours of their boundaries as a people. The process of stumbling over these invisible contours often turned up amusing discoveries. Once, in the courtyard of the Dukas household, the women were talking to her about why a gadje could never make a true bori, a gypsy wife. It was not simply that she lacked the training and sensibility necessary for the role. It was because, they told her, "a gadje wouldn't know how to take out her own eyes". Her what? This, it turned out, was the Romany expression for orgasm.

Bury Me Standing is full of such delicious moments. It is a real achievement: compassionate, amusing, sardonic and highly intelligent. I suspect that even the gypsies themselves might grant Isabel Fonseca that ultimate accolade: not bad for a gadje.