11: The Iraq Mess: Al-Qaeda's New Home

The three men hailing a taxi late last Wednesday near Sulaimaniyah, a city in northern Iraq close to the Iranian border, didn't look like locals. They wore long, dark beards, for one thing and, though it was past midnight, didn't know where they were going. They first told the driver to take them into the city, then changed their minds and asked to be driven to a secluded suburb. Then they pulled guns on the driver and forced him out. "Do not look back," one of the strangers said, before speeding off. In any other part of the world, the crime might be deemed the work of low-level thugs, but in Iraq even minor incidents can take on sinister dimensions. After investigating the taxi driver's story, agents from the General Security Service in Sulaimaniyah reached a chilling conclusion: the three men may have been foreign militants who slipped into Iraq to stage a terrorist attack against U.S. forces and their allies. The next car bomb, the officials warn, might arrive in a taxi.

In Iraq today there's every reason to brace for the worst. The country was still reverberating last week from the shock of the attacks on the U.N. headquarters in Baghdad and the shrine of Imam Ali in Najaf when an explosion rocked the headquarters of the new Iraqi police force in Baghdad, killing one and injuring more than 20. Some Iraqis blamed loyalists of Saddam Hussein for the blast. But the bombing also bolstered fears about the deadly threat posed by small bands of foreign jihadists who have infiltrated the country with the intent of exploiting Iraqi discontent to launch a terror campaign aimed at driving the U.S. out of the country. While investigators have not yet fixed responsibility for the recent wave of attacks in Iraq, U.S. officials are convinced that a familiar nemesis is active there. "Yes, there are al-Qaeda operatives in Iraq, though I wouldn't want to speculate on the numbers," Thomas Fuentes, a top FBI official in Iraq told TIME. "And yes, we do have al-Qaeda operatives in our custody." A U.S. official in the country says the al-Qaeda members in Iraq "almost certainly" number in the dozens.