That's not to say the original al Qaeda group built around Osama bin Laden hasn't been badly damaged. It has. Many key operatives have been killed or captured. While some bin Laden associates remain on the loose in Afghanistan, that troubled country is no longer a sanctuary for Islamic militants.
But the radical Islamic movement has metastasized. Satellite groups are now spread around the world. Europe, which is nearer to the Middle East and has a far larger Islamic population than the U.S. has, is a hotbed of such groups. Some of the key September 11 hijackers such as Mohammed Atta, one of the pilots, were based in Germany rather than the Middle East.
SOFTER TARGET. Britain has an active Islamic jihadi scene as well. Since 9/11, dozens of arrests have been made on terrorism charges. British police say they've foiled several operations in Britain. It may be that one of these groups finally succeeded.
While the British police are vigilant, hitting targets such as London's Underground subway system still seems to be relatively easy. There's no screening of commuters or baggage. London is probably an softer target than major American cities such as New York or Washington, where heightened security measures have been implemented.
Islamic groups certainly have plenty of reason to be unhappy with the British government. Prime Minister Tony Blair has been President George W. Bush's closest ally in America's multipronged response to the September 11 attacks on New York and Washington four years ago. Chiefly, Britain has been the second-leading supplier of troops after the U.S. for the Iraq operation.
RECRUITING FODDER. And since the overthrow of Saddam Hussein in the spring of 2003, the British have been the main force in Basra, the second-largest city in Iraq's south. They're also responsible for support operations for American operations in other parts of the country.
In some respects the war in Iraq is a godsend to the radical Islamic groups -- although they're losing many people there. They can portray the Americans and the British as infidels, slaughtering Muslims and molesting women and children -- ideal for recruiting more youths desperate to find meaning for their lives through their cause.
Highly motivated young people from around the Middle East and, occasionally, Europe have been going to Iraq to fight the Americans. In the heated logic of Islamic militancy, attacks on the British public wouldn't be hard to justify.
ANOTHER SPAIN? "Assuming it's an upstart jihadist group, this is the kind of thing designed to discourage supporting U.S. policies," says Jonathan Stevenson, senior fellow for counterterrorism at the International Institute for Strategic Studies. "I'm surprised it hasn't happened before. There's no other country that has lent as many assets and lives to U.S. efforts in Iraq."
Many people in Britain believe that Blair exaggerated the evidence that Saddam possessed weapons of mass destruction. The perpetrators of the attack may well have thought that they could raise further doubts about the war. Such a tactic worked in Spain, where the attacks on commuter trains in Madrid last year helped secure the election of a Socialist government that quickly pulled Spanish troops out of Iraq.
If anything, however, these attacks in Britian are likely to have the opposite effect -- stiffen Blair's determination to stick with his Iraq commitments. Britain's police may step up their activities, but Blair is unlikely to change his backing of Bush on Iraq.
COMMON THREADS. Within hours of the attack in London on July 7, someone posted a message from a previously unknown group calling itself the Secret Organization of al-Qaeda of the Jihad Organization in Europe on a Web site previously used by Islamic groups. "Rejoice for it is time to take revenge against the British Zionist Crusader government in retaliation for the massacres Britain is committing in Iraq and Afghanistan, "the statement read in part according to a BBC translation.
While it's impossible to verify the authenticity of such Web documents, there's good reason to suspect they're legitimate, at least until evidence points elsewhere. The coordinated, multiple bombings bear a resemblance to other al Qaeda-linked operations, including the Madrid bombings in 2004 that killed around 200 people. One common thread: The attacks tend to be spectacular operations often launched in the morning so as to ensure plenty of news coverage for the rest of the day. Other al Qaeda attacks have been even more lethal. Witness September 11.
These terrorists picked an excellent day on which to gain attention. The G-8 leaders, including Bush, are meeting at the Gleneagles resort in Scotland. London had also barely finished celebrating its surprise selection on July 6 as the site of the 2012 Olympics.
NO PANIC. "This was a sophisticated attack which shows good intelligence and planning and a clear intent," says Charles Blackmore, CEO of security specialists Vance International. "One would surmise that the intent was to demonstrate that by attacking public infrastructure of London, one can cause paralysis of one of world's leading financial centers."
If that was the intent, it will work only up to a point. There was no mass panic in London,nd while some attractions closed, many businesses stayed open. After falling sharply in the morning, U.S. markets rebounded in the afternoon.
As London begins the recovery process, a criminal investigation is now under way to determine exactly who was behind the ghastly attacks. And if Islamic militants are to blame, the event may raise new questions about how the war on terrorism is being waged.
Reed is BusinessWeek's London bureau chief, and Cohn is a correspondent in London