How Al-Qaeda Got Back On The Attack

By Michael Elliott; Mitch Frank

The Sari Club, in the town of Kuta on the Indonesian island of Bali, was one of those places where the world comes out to play. By 11 p.m. on Oct. 12, it was packed with the usual crowd--tanned Australian kids in shorts and halter tops dancing to house music, surfers in from the beach downing beers and Jell-O shots, expat sports teams from Hong Kong and Singapore, backpackers from around the world--the children of globalization, mobile phones in hand, making out before heading back to their cheap hotels. David Fielder, 46, a British rugby referee in town from Hong Kong for a game, was standing with a group of friends, having what was planned to be the night's last drink, when he heard an explosion. Ten seconds later, he says, came something more. "There was a huge bang, and I felt I was lifted up. There was just light and sound--it was like someone knocked me out." Fielder remembers hearing screams and noticing that he could see the sky: the roof of the club had been blown off. Picking himself up from the rubble, he tried to stumble out of the bar, only to fall into a mess of blackened dead bodies.

Investigators with the Australian Federal Police, assisting local Indonesian authorities, think there were three bombs in Bali synchronized to wreak maximum havoc. The first explosion--quite small--was inside Paddy's Irish Bar, a popular watering hole. A few seconds later, a slightly more powerful bomb exploded in front of the Sari Club. Then, as terrified customers poured into the street from the bars, came the real thing; a Mitsubishi L300 minivan had pulled up to the sidewalk, packed with C4 high explosive and ammonium nitrate--around the world, the car bomber's favorite recipe. The van blew up. Survivors tell of the familiar horrors of terrorism: bodies with legs and heads and breasts blown off, roasted skin peeling away from arms, daughters crying for their mothers, mothers desperate to find their kids, a place that only two weeks ago was a byword for beauty, friendliness and fun turned into a scene from Hieronymus Bosch. "Why Bali?" asked Fielder. The only answer is another question: Why anywhere?

Though the Bali bombing was particularly sickening, it was part of a greater spasm of violence that has counterterrorism officials bracing for more. The CIA believes that the outrage was the work of Muslim extremists belonging to the Southeast Asian group Jemaah Islamiah, which the U.S. believes is closely linked with al-Qaeda, the terrorist network headed by Osama bin Laden. And al-Qaeda, CIA Director George Tenet said in congressional testimony last week, is now in "execution phase." Indeed, senior U.S. intelligence sources tell TIME that they fear a recent spate of terrorist attacks around the world may be a warm-up for a much bigger strike against American interests. Al-Qaeda prisoners now being interrogated, says a senior U.S. counterterrorism official, "keep talking about a spectacular event. And I don't think we saw that event in Bali."

Al-Qaeda has always been a network of Islamic terrorist groups. But since the destruction of the Afghan training camps last year, it has had to decentralize many of its operations. That has not diminished its power. Many al-Qaeda operatives are now back in their homelands, or in third countries, making common cause with Islamic groups to wage jihad against the U.S. and its allies. These factions, inspired by the events of Sept. 11, 2001, do not require contact with one another, or a central authority, to act as al-Qaeda would want them to. "Bin Laden unleashed forces accumulating for many years, and all the gloves are off now. Centralized clearance is not needed," says Magnus Ranstorp, a terrorism expert at the University of St. Andrews in Scotland.

The gloves are off indeed. Examining the terrorist attacks before and after Bali, a French investigator notes, "it's starting to look like a campaign of terror rather than a series of dissimilar attacks." Within two days last week, there were three terrorist attacks in the Philippines: two in the southern city of Zamboanga, one on a bus in Manila. Combined, they left 10 dead. (A bomb in Zamboanga earlier in the month killed an additional three people, including a U.S. Green Beret commando.) Before Bali, terrorists in Kuwait had killed an American Marine, and a French oil tanker off the shores of Yemen had been bombed. In a statement purporting to be from bin Laden posted on a website, al-Qaeda praised the Kuwait and Yemen attacks. And in Italy this month, authorities arrested five Tunisians suspected of having terrorist connections. An investigator in Milan told TIME that the plot was the first sign in a year that terrorist cells in Europe were increasingly involved not just in activity like producing false documents but also in preparing new attacks. "They are not as strong as they were before Sept. 11," the investigator said, "but they are better organized than at any point in the past year."

If that all sounds bad, here's worse. The great triumph of the war against terrorism, so far, has been the overthrow of the Taliban regime in Afghanistan and the destruction of al-Qaeda's camps there. But U.S. security sources in Afghanistan tell TIME that there is now clear evidence that al-Qaeda is reestablishing camps across the border from Afghanistan in Pakistan. On a recent trip, a TIME reporter accompanied paratroopers from Task Force Panther, based in southeastern Afghanistan, as they patrolled the frontier (see below). Captain Patrick Willis of the 82nd Airborne says camps in Pakistan around the town of Mirim Shah are training men in bombing and the use of mines. "They have the same infrastructure they had in Afghanistan," says Willis. "A lot of it has just moved east. They continue to recruit from the young impressionable men in the area." U.S. military intelligence believes that al-Qaeda has built the new camps intentionally small so as not to provoke a clampdown from Pakistan's government.

From the camps, convoys of trucks go up well-maintained roads that seem to lead nowhere. In fact, they end in tiny Afghan villages just across the border, where the trucks dump ammunition and weapons in safe houses. Later, according to U.S. Army officials, small groups of between four and a dozen terrorists from the camps cross the border amid the flow of civilian traffic. Once inside Afghanistan, the Americans say, the terrorists are assisted by abettors who provide money, pass on information about U.S. troop movements and safeguard supplies. Loaded with equipment and intelligence, the al-Qaeda forces then move out to harass American troops. Since the U.S. forces cannot cross into Pakistan, they can only try to catch the terrorists after they re-enter Afghanistan.

For the Administration of George W. Bush, the recent attacks and the evidence that al-Qaeda may be regrouping in Pakistan come at a terrible time. Washington is determined to eliminate Iraq's weapons of mass destruction and has made clear that it believes the best way of doing so is by military action. Adding another problem to a plateful of them, the Administration disclosed last week that North Korea, in breach of an agreement signed in 1994, had admitted to restarting its program to develop nuclear weapons. And the crisis between the Israelis and the Palestinians, with its potential for poisoning relations between the U.S. and moderate regimes in the Muslim world, seems as intractable as ever. Mighty the U.S.'s resources may be, but in terms of military, diplomacy, intelligence gathering and synthesis, the system is being stretched. The CIA, with a limited number of spies and a small paramilitary force, will find it hard to wage a worldwide war against al-Qaeda at the same time as it must collect evidence of weapons programs in Iraq and perhaps hunt down Saddam Hussein. A war in Iraq, says a senior U.S. intelligence official, "will make things harder but not impossible. It cannot help but strain us."

Of all these challenges, the enduring potency of Islamic fanaticism may be the most difficult. To its credit, the Administration has never claimed that the struggle against terrorism would be anything other than long and arduous. Yet the success of the bombing campaign in Afghanistan, coupled with the arrest of such key al-Qaeda leaders as Ramzi Binalshibh, who allegedly handled the logistics for the attacks on the World Trade Center and Pentagon, led some to look on the bright side. Nobody pretended that al-Qaeda was finished. But there was quite recently a sense that it might be capable of only relatively small-scale, opportunistic attacks against "soft" Western targets, especially outside the U.S. This year's attacks on German tourists in Tunisia and French contract workers in Pakistan fit that pattern.

You don't hear such talk now. Experts are openly comparing Islamic terrorism to communism and fascism, ideologies that retained the loyalty of devotees despite occasional setbacks. "Al-Qaeda is not just an organization," says Ranstorp. "It's a movement. We shouldn't gauge its success through a short-term prism." It took a year, but recent attacks suggest that the dispersal of terrorists from Afghanistan back to their home bases reinvigorated local extremist groups--among them Jemaah Islamiah in Indonesia--with an influx of logistical and financial resources. That has Tenet worried. "The threat environment we face," he said last week, "is as bad as it was before Sept. 11. It is serious--they have reconstituted, they are coming after us." Al-Qaeda, U.S. intelligence has concluded, is able to plan an attack on the scale of the one seen a year ago. "They still have the capacity for a spectacular operation," says a U.S. counterterrorism official. "In fact, that's what we are expecting next, or in the near future. We don't have a clue where." Officials fear that such an attack could be launched against any one of a number of American cities. And they are particularly worried about attacks by "conventional" means against the chemical or nuclear infrastructure of the U.S., that would cause widespread toxic or radiological fallout.

The amount of "noise" counterterrorism sources are hearing from intercepted communications among terrorist groups has grown to levels last reached in the summer of 2001. Public pronouncements by al-Qaeda leaders--such as the Web statement purportedly made by bin Laden, a separate bin Laden audiotape played on the Qatari TV channel al Jazeera and another ostensibly from his second in command, Ayman al-Zawahiri (U.S. authorities believe that the voice on the tape was indeed al-Zawahiri's)--have added to the tension. A senior State Department official believes that the messages by bin Laden and al-Zawahiri may amount to the starting gun for a fresh campaign. Saad al Fagih, a Saudi dissident based in London, says those in circles close to al-Qaeda talk these days with "strange confidence" about a second big attack against the U.S. "Before Sept. 11, bin Laden would talk in general terms about a major attack coming and a major, major attack following," says al Fagih. "He would say, 'The first attack is going to be this size,' pointing to the tip of his finger, 'and the next is going to be this size,' indicating the whole length of his finger."

To combat the terrorists' ambitions, the Administration has tried to sort out the well-aired problems of coordination and analysis that dogged the counterterrorism operation last year. The effort has had mixed success. The Administration's belated proposal for a Department of Homeland Security remains bottled up in Congress. The FBI is just at the beginning of a mammoth reorganization to refocus its mission on counterterrorism. In June, a mere 10 months after Bush and his national security adviser, Condoleezza Rice, chose retired General Wayne Downing to head counterterrorism operations at the National Security Council, Downing abruptly resigned, frustrated by his lack of power. His successor, retired Air Force General John Gordon--a former deputy director of the CIA--gets higher marks from insiders, though some complain that the Counter-Terrorism Security Group, of which he is chairman, is "too bulky." Meetings of Gordon's committee sometimes have representatives from 15 agencies, among them minor players. If there are 20 to 30 people in a room, some without the highest security clearance, the FBI and the CIA will not share sensitive intelligence, says a White House aide.

Still, in other respects, Bush's war on terror has made some progress lately--partly because there are just more terrorist hunters than there used to be. In addition to the 8,000 members of the armed forces in Afghanistan, there are now nearly 800 U.S. forces based in the East African nation of Djibouti, across the Red Sea from Yemen, and a Marine Corps amphibious assault ship, the Belleau Wood, has been in the area since August. Sources tell TIME the U.S. is looking to use the port of Assab in Eritrea as a naval base to keep an eye on traffic between Yemen, Sudan and Somalia. At home, the CIA's Counter-Terrorism Center (CTC) now has a staff of 1,100 analysts and covert operatives, almost triple the number it had a year ago. Technologists are working on new gadgets to track terrorists, as well as hardware to process the 75,000 cables that come into the CTC from field offices each month. A top-secret website called CT-Link, first established in 1994, has had its reach expanded so that those with the right clearances in 75 government locations in the U.S. and overseas can access the latest intelligence on the fight against terrorism.

Cooperation with foreign-intelligence and law-enforcement authorities is key; since Sept 11, 2001, a total of 2,974 terror suspects have been detained in 98 countries. Americans have learned to use local assets, like the Filipino agents who disguise themselves as ice-cream vendors or beauticians, to track down terrorists. "The feeling here," says a senior French investigator, "is that the Americans are doing an excellent job in police and intelligence terms." Not everything goes according to plan. High-tech listening devices are of no use if nobody sends an electronic message. "The bad guys," says a Western diplomat in Islamabad, "have been taught that talking on cell phones or sat phones is a no-no. Now they are delivering messages on motorcycles." Raids on Afghan refugee camps in Pakistan aimed at finding al-Qaeda men have been compromised by leaks from local police and intelligence services. And--as happened earlier this month in an operation at the Shemshahtoi camp outside Peshawar--even if the FBI and their local friends get into a camp, suspects can easily vanish among the maze of adobe huts, which teem with thousands of Afghans who hate the police. In a similar raid on the Jalousai camp, 12 miles from Peshawar, however, the feds were luckier, picking up four Afghans who were al-Qaeda suspects, plus a trove of sat phones and computer diskettes.

Still, a few phones and some computer files are not sufficient to stop a ruthless enemy whose reputation among its supporters soared after the destruction of the World Trade Center. With such a display of power, whether bin Laden is alive or not is beside the point. "For the militant groups in the Islamic world, it is the ideology that counts, not a specific leader," says Hala Mustafa of the Al Ahram Center for Political and Strategic Studies in Cairo. "The roots of fanaticism will still be there."

Will those roots be watered by a war with Iraq? Optimists within the Bush Administration argue that the removal of Saddam Hussein would open a space for the development of true democracy across the Arab world, one that would offer for the first time a real choice between corrupt authoritarian regimes on the one hand and millennial Islamic extremists on the other. But many experts are skeptical. French officials otherwise wholly supportive of the U.S. are worried that, as one puts it, "some of the headway made against Islamists is lost by American diplomacy that has alienated most of the Muslim world." It is not that the extremists love Saddam. "Frankly," says a French source, "they don't give a s___ about Iraq, and they openly disdain Saddam as corrupt. But anything that happens in Iraq will just be used as further justification for terrorism." But if American soldiers are welcomed as warmly in Baghdad as they were by the people of Kabul, the effect of a war on the recruitment of terrorists might be different.

Even if things turn out well in Iraq, Islamic terrorists will still be around, still able to kill and maim. Says Omar Bakri, who is based in London and is the leader of the radical Islamic Al-Muhajiroun youth movement, "The message was so clear in Bali--it is a war against the disbelievers' camp." A French investigator puts the terrorists' chilling beliefs in stark terms. "They really, truly don't care about which Westerner they murder," he says. "Just so long as an enemy is dead." In Bali, where a precise count of the charred bodies is not yet complete, more than 180 died. They will not be the last. --Reported by Bruce Crumley/Paris, Helen Gibson/London, Jeff Israely/Rome, Scott MacLeod/Cairo, Tim McGirk/Islamabad, Isabella Ng and Andrew Perrin/Bali, Douglas Waller/Washington and Michael Ware/Paktia

With reporting by Bruce Crumley/Paris, Helen Gibson/London, Jeff Israely/Rome, Scott MacLeod/Cairo, Tim McGirk/Islamabad, Isabella Ng and Andrew Perrin/Bali, Douglas Waller/Washington and Michael Ware/Paktia