The Hakawati, by Rabih Alameddine

Across a sea of stories with Osama's fibbing clan

Despite Naguib Mahfouz's Nobel Prize, there has been much discussion as to whether the novel is an appropriate form of Arab expression. While love and adventure abound in Middle Eastern storytelling and poetry, few portrayals of hothouse family life exist. The tour de force of Rabih Alameddine's novel The Hakawati ("storyteller" in Arabic) is that it moves effortlessly between the classic narrative traditions of The Thousand and One Nights and the psychology of modern Western fiction.

At the heart of Alameddine's saga of four generations of a Lebanese family is a hakawati of such dubious origins – a bastard Armenian who escaped the 1915 genocide in Turkey – that his employer and patron, a Lebanese bey, gave him his surname al-Kharrat: fibber or liar. From this lowly position, within one generation, a family empire was spawned and the hakawati's rich oral traditions were replaced by mundane commerce: Lebanon's first car dealership. Only family outsiders – the protagonist and grandson Osama, who returns to his country for his own father's death, and his unmarried uncle Jihad, a raconteur and pigeon fancier – continue the grandfather's survival strategy of spinning tales within tales.

Like the hakawati whose exploits of Scheherazade thrill audiences to this day in Damascene cafés, Alameddine reveals his intent by listing the influences for this, his second novel – including Ovid's Metamorphoses, Italo Calvino's Italian Folktales and Jim Crace's The Devil's Larder. He explains, "By nature, a storyteller is a plagiarist. Everything one comes across... is a coffee bean that will be crushed, ground up, mixed with a touch of cardamom, sometimes a tiny pinch of salt, boiled thrice with sugar, and served as a piping-hot tale."

While the book's religious references are fabricated, the fictionalised lessons of the Old Testament Abraham, caught between two wives, the determination of the servant sorceress Fatima to retrieve her sawn-off hand – considered a mystical amulet across the Middle East – and rise of Baybars, who herald the reign of the Mamluks, the slave kings of Egypt, are stories about reshaping identity and destiny. These are self-help lessons from a mythical past that reverberate in Osama's family stories.

In The Hakawati, both ancient and modern women are powerful and pragmatic. Homoerotic love, while not universally accepted, is acknowledged and expressed. Osama's mother, from a prominent Lebanese family, the Khourys, marries beneath her social status into the al-Kharrats after meeting the man who becomes her soul-mate: not Osama's father Farid, but his uncle Jihad.

When Jihad unexpectedly dies on a trip abroad, one of his many mistresses – his mother, like the sorceress Fatima – seizes the moment. She brings her husband back home and effectively saves him. In Alameddine's world, the present and present always collide. A decade ago, his remarkable first novel Koolaids: The Art of War also told simultaneous stories, about death in San Francisco and civil war in Lebanon.

If the novel has the transformative power to reveal an age, The Hakawati conjures a complex Middle East, where those who stay at home are frustrated. Elie, the neighbourhood bully and son of the superintendent of the al-Kharrats' building, becomes a militia leader who oozes sexual charisma. After a shotgun wedding to Osama's sister Lina, he retreats to the company of men in the city's abandoned cinemas for porn and drugs, while she finds fulfilment in selling cars. Another of the al-Kharrat cousins likes to pretend to be a tourist in his own country.

Osama, like his Jewish childhood neighbour Fatima, a gold digger in Saudi Arabia, represent the lost generation in the Middle East diaspora. He attempts to come to terms with where he lives, in California, with a conservative Lebanese upbringing. As the receptacle and transmitter of his grandfather's tales, only he can reconcile the fractured generations of his family through a miraculous bridge of stories – Alameddine's language of hope for a beleaguered region.

Malu Halasa and Rana Salam's 'The Secret Life of Syrian Lingerie' is published by Chronicle next month