Somehow Libya and its extremely odd dictator have acquired a reputation for being Arab secularists opposed to al-Qaeda and Islamist extremism. But the indictment of American Muslim Council Executive Director Abdurahman Alamoudi proves the opposite. Alamoudi was indicted for attempting to launder Libyan money to Islamist groups in the U.S. Alamoudi was supposed to lobby the U.S. government for the removal of sanctions on Libya in exchange for the money. So, Libya does in fact support Islamist activity. It opposes the local al-Qaeda affiliate, which seeks to overthrow the current Libyan regime. But like so many of these countries, the farther from its own borders the less pragmatic and more ideological its policies.

This also fits into a pattern in which Libya uses money very cleverly to build its own credibility and fund terrorism. The most famous incidents were Libya's brokering the release of hostages held by Abu Sayyaf - an al-Qaeda affiliate based in the Philippines. Libya received international recognition for its role in securing the release of the hostages. But at the same time, by paying the ranson, was effectively funding terrorism.

A neat trick - gaining international credibility by FUNDING TERRORISTS!

If the gambit with Alamoudi had been successful, Libya would have effectively been supporting terrorism and lobbying to have US sanctions lifted with the same dollar - the ultimate two-for-one.

This morning's Wall St. Journal ran an op-ed by Dennis Ross. One of the leading American figures in the Oslo peace process, Ross is now the Executive Director of the Washington Institute for Near East Policy. Ross argues that the new Palestinian Prime Minister, Abu Ala needs support from Israel if he is going to be able to confront Palestinian terrorist organizations. The key in these discussions is always Yasser Arafat who both Israel and the U.S. have vowed not to deal with any further because of his continuing links to terrorist activity. The problem is that Arafat is ultimately the one calling the shots. His control is frequently underestimated, but even minor cash disbursements and personnel appointments are in his hand. He uses his control over the finances to keep the security forces bound to him personally.

Ross proposes that Israel permit Arafat freedom of movement again (Israel confined him to his compound and informed him that he was free to leave the West Bank but that he would not be able to return). By granting this concession, Abu Ala would have the credibility to confront Arafat on other issues and ultimately marginalize him.

The problem is that this won't work - it never works. The despots of the Arab world, Assad, Saddam, Arafat et al have proven to be lousy generals, administrators, and visionaries. But they are very adept at power politics, and they will not be outplotted - certainly not by the historically undevious United States.

The U.S. spent most of the 1990s attempting to foment a coup against Saddam - without success (and attempts to do so often exposed vital allies and contacts to Saddam's intelligence services). Arafat, the weakest Arab leader in conventional terms, is perhaps the most clever. He has survived the hostile politics of the Middle East for over four decades - despite having limited military power and resources and many more powerful enemies. Besides Israel (the least devious Middle Eastern power) Arafat has survived the emnity of King Hussein of Jordan and Syria's Hafez al-Assad (no patsy - ask the residents of Hama).

At plot and counterplot Arafat is a master. We will never be his equal and any plan predicated on easing him out of power is wishful thinking.

There are simply too many things to discuss on terrorism around the world. I’ll just share a few observations.

In Israel a recent terrorist attack on the settlement in Netzarim led to calls for Israel to evacuate the settlement – it is only a few hundred people, guarded by an entire IDF battalion, in the heart of the Gaza strip. It has been subject to innumerable attacks during the al-Aqsa Intifada. Residents argue, and are echoed by Israeli Prime Minister Ariel Sharon, that Netzarim protects the rest of Israel because the terrorists attacking Netzarim aren’t attacking Jerusalem.

It is an interesting argument in light of the recent EU poll showing that EU citizens view Israel as the leading threat to world peace. In fact, Israel probably protects Europe from terror – because an attack on Israel is an attack that isn’t targeting Europe. If Israel did not exist, the Arab world would still be impoverished and oppressed. The various despots would still seek to distract their people with an external enemy. Europe, towards which the Arab world harbors ancient and modern enmity, would be an obvious target.

One gauge to consider the trouble the EU is saved by Israel is financial. The major organizations targeting Israel (Hamas, Hezbollah, Fatah, and Palestinian Islamic Jihad) raise hundreds of millions of dollars a year between them to build the infrastructure to carry out terrorist operations against Israel. Bear in mind that the 9/11 operation cost al-Qaeda about $500,000. Granted that figure doesn’t include the start-up costs necessary to found the organization and recruit and train operatives.

In another part of the world, the President of Sri Lanka has apparently launched an internal coup against Sri Lanka’s Prime Minister. Sri Lanka is locked in a vicious terrorist war with the Tamil Tigers who are fighting for independence for the Tamil minority that dominates the northern part of Sri Lanka. The Tigers are one of the deadliest terrorist groups. They are leaders in suicide bombings, use child soldiers, and have a sea-going arm that allows them to smuggle weapons and people throughout Southeast Asia. Although they are Hindu, they have cooperated with Pakistan’s ISI and al-Qaeda.

The Sri Lankan government is engaged in a peace process with the Tigers. The Prime Minister’s party represents the peace camp. The President’s party represents the hardline camp. While the Prime Minister was traveling, the President sacked the Ministers of Interior, Defense, and Media (all allies of the Prime Minister) and began deploying troops – apparently in opposition to the Prime Minister’s concessions to the Tamil Tigers.

I confess that I am not terribly familiar with this conflict. But occasional glances at the news stories about the war in Sri Lanka reveal that the Tigers are frequently caught recruiting child soldiers and smuggling weapons – and they promise it will be the last time. My knowledge of the failed Oslo process, with its blind eye to the incitement and terrorist build-up on the Palestinian side, makes me worry for the long-suffering Sri Lankans. My wariness is increased knowing that the Norwegians are brokering the Sri Lanka-Tiger peace talks.