The Kurds had laid out bait for their prey. In early January, Kurdish security officials spread word in the villages along Iraq's border with Iran that one stretch of the mountainous frontier was lightly guarded and thus safe for travelers who had reason to slip unnoticed in or out of the country. Then the Kurds waited. "It was like dropping seeds for a chicken, saying 'Come, come,' and then catching it," a Kurdish official involved in the sting told TIME. It was a crisp morning in mid-January when the chicken fell into the trap.

The tall man in an open-neck shirt, jacket and trousers looked like any of the traveling merchants who frequent the area. When he was stopped at a Kurdish checkpoint near Kalar, officials made an intriguing discovery in his travel bag: two CDs and a computer flash disc the size of a cigarette lighter. With a hunch who their catch was--the CIA had given them a heads-up that he might be in the area--the Kurdish officials snapped a digital mug shot of the traveler and e-mailed it to their American intelligence contacts. The confirmation came back quickly: the Kurds had nabbed Hassan Ghul, one of the key al-Qaeda operatives still on the run. "When Washington heard we had him," said a Kurdish official in Baghdad, "they were doing cartwheels."

The satchel was at least as important as the suspect. On one of Ghul's discs was a 17-page progress report and future plan of action in Iraq written to "You, noble

brothers, leaders of Jihad." The author, U.S. military officials have concluded, was Abu Mousab al-Zarqawi, whom U.S. intelligence believes is al-Qaeda's top operative in Iraq. If the memo is what Washington says it is, and if its author is not exaggerating, then al-Qaeda has played a greater role in the insurgency in Iraq than anyone has appreciated. The letter's author claims to have overseen 25 suicide attacks against various targets in Iraq, which would constitute almost all such assaults since the U.S. rolled into Iraq.

The report and other files captured with Ghul suggest a long-term strategy by an international terrorism organization to turn occupied Iraq into the front line of the global jihad. The memo, whose discovery was first reported by the New York Times, expresses frustration that the fight in Iraq has not been more successful as well as concern that it will soon fail. But, as a final strategy to upset U.S. efforts to stabilize Iraq, the memo suggests provoking strife between the country's two main religious factions--the Sunnis and the Shi'ites--through attacks on Shi'ites, who would then presumably strike back at Sunnis. Shi'ite-Sunni discord is already problem enough for U.S. occupation authorities without al-Qaeda's stirring up more trouble.

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