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The Albaicin or Albayzin is like a typical Andalucian village of white buildings located on the hillside opposite the Alhambra. This is the old Moorish area of the city and part of the World Heritage Site. Its winding streets, charming houses and various shops, restaurants, and bars are worth exploring. This area also has many miradores, small plazas from which you can find excellent views of the Alhambra, the Sierra Nevada, the old city walls, etc.
There are a number of teterias, or tea houses, located in the lower part of the Albaicin, just up from the Calle Elvira. There are also many little shops located in the same area. Small restaurants and cafes are dotted throughout the Albaicin.
Sacromonte is located on the outskirts of the Albayzin in the hills of Granada. It can be reached by foot from the city center, which is an excellent way to sightsee the most unique parts of the city. Sacromonte was traditionally where the gypsies lived, in whitewashed caves built into the hillsides. Go to Sacromonte for flamenco shows, or take flamenco and Spanish classes at Carmen de la Cuevas. It is also possible to rent cave-apartments for accommodations, rather than staying in a hotel.
Plaza Nueva was created by the Spanish monarchs after Moorish Granada fell. It is a good central location from which to explore the various parts of the city, and also hosts numerous bars, restaurants, and services.
Coming off from Plaza Nueva, in the relatively flat downtown area, you will find numerous important Renaissance buildings and good shopping.