How does Wiesel juxtapose illusion and reality in terms of the German occupation and how does it effectively establish mood?

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In section one of Elie Wiesel's memoir Night, the Jews are under the illusion that nothing will happen to them. They won't believe the horror stories of Moshe the Beadle who has witnessed the reality of Nazi atrocities in the forest of Galicia. Despite this first hand account they continue to remain optimistic. They hear contrasting reports of what is happening. Some reports suggest that the war will end soon and they will be untouched, but increasingly, bad news filters into Sighet. The Germans have occupied Hungary and the Jews in Budapest are living "in an atmosphere of fear and terror."

Soon the Nazis arrive in Sighet "with their steel helmets, and their emblem, the death's head." Even this does not collapse the illusion of safety. When a German commander gives Madame Kahn a box of chocolates, relief again pervades the town. The townspeople believe the Germans are simply benevolent guests. Even when the ghettos are set up and the deportations begin, many of the Jews cling to the illusion they will ultimately be safe. Elie's father refuses the pleadings of his servant Martha who wants to hide the family in her village.

The mood in this section is increasingly nervous and foreboding. The reader knows the outcome so becomes increasingly frustrated with people who are on the brink of disaster yet seem to carry on with their normal lives. Elie repeatedly notes that his mother continues with the everyday activities of the house despite the signs that indicate things will never be the same again. This same mood was reflected throughout a world where nobody could possibly envision the brutality of the Nazis and their attempt at total genocide. The illusion is soon obliterated when the Jews come to the gates of Auschwitz and are confronted by the reality of the flames which Madame Schächter had predicted on the train.   

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