The Bali bomb proves the need for a war on terror, not a war on Iraq

It is now clear that the bomb blast in Bali was the most murderous terrorist attack since the destruction of the World Trade Centre in New York 13 months ago. Connected or not to the al-Qa'ida network – and there seems no conclusive evidence one way or the other – it shows that the threat of terrorism worldwide is as potent and immediate now as it was when President Bush declared his "war on terror".

If the global nature of the threat has not changed, however, the strategic and security priorities of the US administration unfortunately have. One year ago, Mr Bush managed to harness sympathy for the United States the world over to create an anti-terrorist alliance broader than any alliance since the first President Bush's Operation Desert Storm liberated Kuwait. It transcended geographical, ideological and religious boundaries. It incorporated Russia, China and the states of the European Union. It drew the acquiescence, if not always the active support, of the Arab states and Iran.

There was almost universal recognition then, born of the shock of 11 September, that terrorism was the principal threat that states had to face. Policies were reordered to reflect changes long advocated in intelligence and security circles. State-to-state wars were no longer regarded as the only, or even the most likely, threat to international peace. The focus was now on so-called "asymmetric threats": seemingly random acts of terrorism, not necessarily even sponsored by states, that could have a devastating effect on otherwise well-defended, well-ordered and wealthy societies.

There was widespread agreement, not just within the US, but in Nato and the European defence establishment, about the need for new types of defences. Among the imperatives identified were more mobile and flexible armed forces, the need for better security at vulnerable targets – embassies, symbolic buildings and nuclear power stations – and, above all, more effective intelligence. The extent of official ignorance about al-Qa'ida was one of the most shocking revelations.

Since then, two things have become apparent. First, US intelligence knew far more about al-Qa'ida and other Islamic terrorist organisations than governments acknowledged in the immediate aftermath of 11 September. As transpired from US Congressional hearings, the problems lay less in the provision of intelligence than in the capacity of the US government to process, evaluate and then act on what it knew.

Second, the US signally failed to capitalise on the vast wave of solidarity that surged towards it after 11 September. Its treatment of prisoners captured in Afghanistan, its seemingly cavalier attitude to civilian casualties, the enduring belligerence of its language and its high-handed attitude towards its allies resulted in a squandering of international goodwill. President Bush's warning after 11 September that "all who are not with us are against us" now rings all too true.

But nothing has undermined the collective war on terrorism more than the way in which the Bush administration has caused it to mutate, before our eyes, into preparations for an old-style US-led war on Iraq. The US may not yet have given up on an international effort to combat terrorism – it has forces deployed in anti-terrorism operations in places as far apart as the Philippines, Georgia and Kuwait – but the thrust of its military and propaganda effort is now Iraq. The deadly terrorist attack in Bali, once described as the most peaceful place in the world, shows the folly of that approach.