Luxembourg began life as a fortress in AD 963, and then added even more fortifications over the following centuries. That plan backfired, though, as once it had added strong city walls to its already covetable location, Luxembourg ended up on the political map as a must-have for all powerful nearby nations. Ultimately, its thick walls failed to protect it, and at various times the little country has passed through the hands of Burgundy, Spain, France, Austria and Prussia. And finally, in World War II, it was brutally pummelled by the Germans.

The lovely old walls that remain around the edges of the town centre now constitute just a fraction of what was once there. In 1867 the Treaty of London declared the Duchy neutral, so Luxembourg was demilitarised and, tragically, many of its historic fortifications were torn down. Luckily, the remaining bulwarks are a UNESCO World Heritage Site.

The old town, high above the gorges and dating from the 17th century, is Luxembourg’s biggest draw. It is the heart of the city, with its narrow streets attracting arty residents, quirky shops, traditional cafés and fine restaurants. The colourful public squares are the focal points of the city, particularly in warmer weather. Place Guillaume II has the town hall along one side and is also home to markets and concerts. Less formal is the place d’Armes, where locals drink at the café terraces and listen to live jazz or brass bands in the evening. The National Museum for History and Art (Marché aux Poissons, 479 3301, www.mnha.lu, closed Mon) is an attraction in itself, with underground extensions built into the rock face. The Museum of the History of the City of Luxembourg (14 rue du Saint Esprit, 479645, www.musee-hist.lu, closed Mon) gives an impressive multimedia overview of the city. Also check the progress on the Musée d’Art Moderne (10 avenue Guillaume, 453 7851, www.mudam.lu/Museedartmoderne), due to open in 2006.

But it’s the ramparts that constitue the city’s most impressive sight. The best views can be had from the winding walkway called the Chemin de la Corniche. This is also where you go to explore the Casements, which are made up of 14 astonishing miles of underground tunnels and galleries carved deep in the rock. From one of the three bridges over the gorge you can either walk or take a lift to the Alzette valley floor for the old settlements of Grund, Clausen and Pfaffenthal. These were traditionally homes to artisans who needed the river water for their craft. As quiet as it may seem, much of Luxembourg’s nightlife happens down here, away from the more sober sophistication of the upper town.

• Tourist information: place d’Armes (22 28 09, www.lcto.lu).