Three years after the September 11^th attacks and the U.S counter-attack in Afghanistan, Osama bin Laden remains at large, his chief deputy, Ayman al-Zawahiri, continues to taunt struggling American forces in Afghanistan and Iraq, and warnings of attacks here at home routinely spike into high alert. By most indicators, we are losing the war with al Qaeda. And not just the military war. We are losing the war against Islamist terrorism in its entirety, as anti-American passions spread like wildfire throughout the Muslim world.

• Al Qaeda is adapting and beginning to re-group. While U.S. forces and funds flowed into the war in Iraq, al Qaeda has set up new training facilities inside Afghanistan, according to a recent United Nations report. Although much of their leadership has been killed or captured, the group continues to function and communicate, as the recent release of al-Zawahiri’s video demonstrates. Moreover, a senior CIA officer recently told Congress that the Agency has fewer "experienced case officers" assigned to its bin Laden unit than it did on September 11, 2001. While the group poses less of a direct threat now than it did three years ago, al Qaeda is not yet finished, and could pose an even larger danger if Afghanistan deteriorates further.

• Terrorist groups inspired by al Qaeda are metastasizing. Al Qaeda has morphed from a controlled hierarchy to a global network of groups with little formal structure but united by a set of overlapping goals. Al Qaeda’s somewhat limited ability to conduct attacks itself is far outweighed by the growth of independent groups inspired by al Qaeda and its anti-American, Islamist principles. For example, the March 11th Madrid attacks were spawned by an October 2003 bin Laden statement that identified Spain as a legitimate target. The suspects in that incident had never been to Afghanistan, nor did the Spanish authorities consider them to be significant threats. Another example is the "Al Zawahiri Loyalists" responsible for kidnappings in Iraq. Even the Chechen terrorists that massacred over 350 people in Beslan this month identify themselves with al Qaeda’s brand of radical Islam.

• The number of significant terrorist attacks is increasing. According to the State Department’s revised Patterns of Global Terrorism: 2003 report, there were 176 "significant" terrorist incidents in 2003, the most in the last 20 years. This estimate did not even include insurgent attacks against "combatants" in Iraq and Afghanistan. In fact, the number of significant terrorist incidents has been increasing for three straight years. There were more attacks in the two years following 9/11 than there were in the two years preceding it.

• We are losing the battle for hearts and minds in the Muslim world. As Harvard professor Joseph Nye notes, there has been "so much emphasis on ‘hard power’ that we have helped create more recruits for Osama bin Laden." Just this past Sunday, Colin Powell said, "we have seen an increase in anti-Americanism in the Muslim world…" Indeed, a recent survey done by the Pew Research Center for People and the Press revealed that Osama bin Laden enjoys a 65% favorability rating among Pakistanis and a 55% positive rating among Jordanians, both of whom are U.S. allies. President Bush is viewed positively by just 7% and 3%, respectively. Furthermore, 78% of Jordanians and 60% of Pakistanis oppose the "war on terror." Despite such desperate numbers, however, the State Department has added only 34 public diplomacy officers since 9/11, and the position of Undersecretary of State for Public Diplomacy and Public Affairs has not been permanently filled. Currently, the Assistant Secretary of State for Educational and Cultural Affairs occupies the position in an "acting" capacity. Lastly, the budget for public diplomacy is a mere $1.45 billion, or less than 14% of what is being spent on missile defense programs.

• The effort to dry up terrorist financing, while important, is insufficient. The United Nations recently determined that the sanctions regime imposed on al Qaeda and the Taliban has had a "limited impact." The March 11^th attacks in Madrid, the bombing of the USS Cole and the 1998 embassy bombings each cost between $10,000 and $50,000. Only 9/11’s budget was in the six-figure range. As al Qaeda "franchise" groups continue to spring up it will become nearly impossible to freeze all of their assets and uniformly impose sanctions. Thus, even if efforts to keep money out of the hands of terrorists are relatively successful, it is no guarantee against major attacks. The terrorists seem to be adapting more quickly and effectively than we are.

The effort against terrorism has made some progress over the past three years, but unfortunately, it has not made nearly enough. It is true that many suspected terrorists have been apprehended and the American people are certainly more vigilant than they were prior to 9/11. Nevertheless, we have not done enough to finish off al Qaeda, while the war in Iraq and other U.S. policies in the Middle East have created more terrorists than it have been eliminated.

While Congress unwisely rushes to rearrange the intelligence bureaucracy base on some of the recommendations of the 9/11 Commission, it would be wise to consider two of the best, but ignored findings of that commission:

And,