As artillery shells explode and sniper fire rains down on a ruined city, editors and reporters of a small newspaper called Oslobodzenje, or "Liberation," are risking their lives to produce a daily newspaper out of an atomic bomb shelter in war-torn Sarajevo.

In an interview yesterday at Harvard's Nieman Foundation for journalism, Oslobodzenje's editor-in-chief, Kemal Kurspahic, described how he produces a publication out of a gutted basement that serves as both newsroom and home for 70 staff members.

Kurspahic was in Cambridge yesterday to receive the 1993 Louis M. Lyons Award for conscience and integrity in journalism. A $5,000 honorarium was presented to Kurspahic at a luncheon hosted by Nieman Foundation curator Bill Kovach.

That money will likely prove very valuable to the financially stricken paper, which remains in dire need of newsprint and computer equipment.

In its daily struggle to find the materials necessary for publication, Oslobodzenje is assisted by a European fundraising group known as "Reporters Without Frontiers." The group smuggles newsprint, computers and communications equipment into the building, a charred ruin of what once was a proud, nine-story publishing house.

The reporters, who constantly risk injury and even death, work seven days a week in shifts, with some starting at dawn and others at dusk. They avoid leaving the building, for fear of drawing Serbian sniper fire.

"Sometimes [the reporters] work under candlelight throughout the night when there is no electricity in the city," Kurspahic said.

The reporting staff is a mix of Serbs, Croats and Muslims, reflecting a rare harmony in a particularly tense area.

"We represent the idea of tolerance of culture--which is exactly what the opposition wants to destroy," Kurspahic explained.

Kurspahic said Oslobodzenje comes under fire every day from Serbian nationalists, who dislike the diverse nature of its staff. This antagonism, however, has not diminished the paper's advocacy of a multicultural Bosnian state.

'A Symbolic Victory'

Last June, amid heavy fighting in Sarajevo, Serbian forces set fire to the newspaper's building, leveling all nine stories.

"People in the city were watching pictures of our building burning down on the evening news," Kurspahic said. "What they didn't see was that the whole time my reporters were in the basement working on the next day's issue."

Kurspahic said the staff pulled together that night.

"I gathered the editors together and told them that if they wanted to leave--to take care of their families--that they could," he said. "But no one left that night."