[In the following review, McCulloughassesses the narrative style of A River Town.]

Traditionally, the annual announcement of the Booker Prize, Britain's most famous fiction award, comes accompanied by ready-made controversy. But when Thomas Keneally won in 1982 for Schindler's Ark (published in the United States as Schindler's List), the outcry was over an issue more basic than the usual squabble over quality. The book was non-fiction, the protesters said, and not a novel at all.

Such confusion over the line that separates fiction and nonfiction seems to be a typical problem for Mr. Keneally. But then few novelists are quite so invisible as he is. Like a master character actor, he disappears into his subjects. Whether he is dealing with Joan of Arc or the American Civil War or the negotiations leading up to the end of World War I or revolt and famine in contemporary East Africa, the grace and clarity of his writing style—not to mention his facility as a story teller—often get overlooked because he works so magically with such mundane things as facts.

Which is why I am sorry Mr. Keneally has let it slip with hints on the dedication page and in prepublication interviews that his impassioned new novel—his 21st—is based on events in the lives of his grandparents, real Irish immigrants who ran a real grocery store in a raw little Australian river town back at the turn of the century. This simply opens the way for the kind of speculation that always hounds Mr. Keneally. That any of A River Town is "real" or "true" or "based on fact" should be beside the point. It is a wonderfully rich novel, and readers should appreciate Mr. Keneally—who has never as a writer been emotionally more visible—not as an especially clever cryptohistorian but as a novelist with a vision of his own.

The name of the river town is Kempsey, an isolated village on the banks of the Macleay River, hundreds of miles north of Sydney. The year is 1899. The Victorian era is about to end. An aging British Empire is feeling the strains of civil war in South Africa and appealing to its colonies for help (or perhaps simply for cannon fodder). An infant Australia is debating its future: how unified does it want to be, how independent of that distant island so many of its residents still call home? In Kempsey, the future is embodied in the pilings of a bridge being built across the Macleay that promises to unite a handful of scattered villages into a city.

At present, though, it is a divided little town, with English and Irish—few think of themselves as Australians—maintaining an uneasy and distrustful peace. Tim Shea, from County Cork, owns one of the town's general stores, one that can count on its Irish clientele but needs some wealthy English customers to prosper.

Tim is a good man trying to do an honest job, extending more credit than is probably wise, but he is haunted by dreams and memories and what he considers his responsibilities. He regrets losing a successful pub he was unable to buy because his arranged bride from home, Kitty, did not arrive in time (pub owners must be married men). He daydreams about the beautiful wife of one of his wealthiest customers. Although he cannot afford to, he secretly takes on the financial care of an orphaned farm girl simply because he was one of the first to arrive at the scene of her father's fatal accident.

Most of all, he is haunted by a dead young woman. No one knows her name; no one remembers having ever seen her. She died during an illegal abortion. Her body was buried in a local graveyard, but her head has been placed in an alcohol-filled jar that is being shown around the countryside (although not to "respectable" women) by an especially inept policeman.

Inexorably, step by step, always by doing what he believes to be the good or right thing, Tim digs himself deeper into trouble. Often he is accompanied, against his better judgment, by a traveling Punjabi herbalist, someone even lower on the social scale than an Irishman. At his lowest ebb, Tim is even suspected of introducing bubonic plague to the Macleay Valley.

A River Town is hardly a lyrical novel. There is a curious stillness about it. The relentless heat is palpable. Smoke from wildfires in the nearby mountains clouds the sky. The countryside around Kempsey, places with names like Euroka and Dongdingalong, seems drab and featureless. As Mr. Keneally describes it, only the river—the community's link to the outside world—is alive and moving, relentlessly sweeping with a force that just recently cut a new path to the sea.

This is a truly compassionate novel, full of vividly portrayed outcasts. They are outsiders in a nation of outsiders who are only beginning to define themselves in their new home, people who thought that "if they traveled 12,000 miles, they might outrun original sin." Instead, Mr. Keneally writes, they found that "the old Adam was already waiting for them on the new shores. Met every damned boat."

The final pages seem a bit hurried, as if the characters, having met this crisis, were in a rush to get on with their lives. Or perhaps the author realized that in the conclusion of Tim Shea's heroic, seemingly predestined story are the seeds of a broader, even more complex tale that needs to be written as soon as possible. Either way, A River Town is a finely told novel. It is fired with the passion and hidden poetry that only a sure and experienced novelist can bring to fiction.