Midnight came, corks popped, fireworks exploded, the ball fell, the threat passed. Except that it didn’t, really. Top officials of the FBI and the CIA believe there is a loose network of Islamic extremists planning terrorist attacks in the United States–and those are just the ones they know about. The scary headlines last week were not a media contrivance. By advertising a crackdown and tightening security for New Year’s Eve, the authorities believe they warded off a terrorist strike, but only for the time being.

America entering the 21st century is the strongest, most dominating nation in the world. It is also the biggest and softest target for the dangerous resentments of the left-behind. The potential terrorists include not only religious fanatics who regard the spread of Western culture as blasphemy, but any number of apocalyptic loonies who believe they can start a race war or herald Judgment Day by setting off a bomb or two. The very attributes that put America on top–freedom and technology–make it vulnerable to terrorism. A mobile, open society with porous borders and a genuine Bill of Rights is very difficult to police. The Internet, which has sped up and freed up commerce, is a breeding ground for computer viruses and cyberterror. Most frightening is the threat of nuclear, chemical or biological weapons of mass destruction (WMD) falling into the wrong hands.

Some of these fears are hyped. The average American still has about as much chance of being hit by lightning as of being killed by a terrorist bomb. Terrorism still does not jeopardize national security, in the sense that terrorists could overthrow the government or wreck the economy. The real threat of terrorism is fear itself–that we will cut back on the safeguards that protect individual rights. Still, there is an uneasy sense at the top levels of government that the terrorist threat is growing within the United States, that the dark side of globalism is a new breed of “transnational terrorist” whose only aim is to kill as many people as possible. Though Washington and local governments are organizing and spending money to head off terrorist attacks and clean up afterward, they somewhat reluctantly concede that America’s best defense against terrorism is the clumsiness of terrorists who blunder and get caught.

While urging citizens not to panic, President Clinton has perhaps inadvertently heightened fears. Clinton scared himself several years ago by reading Richard Preston’s novel “The Cobra Event,” about a bio-terror attack on New York City. The president has repeatedly raised the specter of biological and chemical weapons, warning that their use is “highly likely” in the century ahead. Clinton’s warnings have overshadowed more sober or informed assessments. In mid-December, a commission of experts authorized by Congress to examine the terrorist WMD threat played down the danger of “loose nukes” or biochem weapons that could inflict thousands or millions of deaths. These weapons are much harder to build in real life than in novels and movies, the commission’s report concluded. The panel, under Virginia Gov. James Gilmore, studied the experience of Aum Shinrikyo, a cult that spent millions and recruited some of Japan’s best and brightest to create weapons of mass destruction and succeeded only in killing 12 people in a 1995 nerve-gas attack on the Tokyo subway. Contrary to myth, weapons of mass destruction are not easy to buy on the black market, and the technical challenge of setting them off is much greater than is commonly understood. The market for loose nukes appears to be more fictional than real, though experts do worry about homemade “dirty bombs,” conventional explosives laced with radioactive material that could contaminate a wide area.

Terrorists operating with the backing and resources of a national government could probably overcome the technical hurdles to building a biochem weapon or obtaining a nuclear bomb. Rogue states like Iraq and North Korea have well-financed and busy WMD programs. But the Gilmore Commission doubted that despots like Saddam Hussein or Kim Jong Il would run the risk of retaliation from the United States, or entrust nukes or germ bombs to terrorist groups that might be tempted to use the weapons in unpredictable ways. Far more likely, the experts say, are attacks from loners or disparate terrorist cells using crude conventional bombs. Anthrax is less apt to be used than a commonplace industrial contaminant tossed into the town water reservoir.

More frightening than the weapons, perhaps, is the type of terrorist. Throughout the cold war, terrorist groups usually had concrete demands: U.S. troops out of Europe, say, or the destruction of Israel. Terrorist groups like the Irish Republican Army and the Palestine Liberation Organization had political agendas and hopes of achieving legitimacy. Their ambitions set limits on the death and destruction they wrought. “Terrorists want a lot of people watching and a lot of people listening and not a lot of people dead,” said terror expert Brian Jenkins. But the new breed of terrorists has murkier goals. They seem more interested in killing than in publicity. In many ways the new terrorist is a throwback to an old model, the turn-of-the-20th-century anarchist whose only real object was to create chaos.

The Islamic extremists aiming at America fit a depressingly familiar profile. “They are taught by the imams that Americans are infidels, and that if they kill them they will go to paradise,” said Roland Jacquard, a well-known authority on international terrorism. “It starts in childhood.” Many fought in the anti-Soviet jihad in Afghanistan (where some were trained by the CIA) or in Bosnia. Often they fought with extremist movements that tried and failed to overthrow secular governments in Egypt or Algeria. The suppression of fundamentalist revolutions in those countries has created a kind of terrorist diaspora, one that could be further fed by the Middle East peace process as angry dissidents splinter off to keep on fighting. Inspiration and financial support sometimes come from Osama bin Laden, the Saudi businessman who, in the words of one top CIA official, has set himself up as an “evil Ford Foundation” to provide seed money to terrorists. Yet it’s not clear that Islamic terrorist cells in the United States are taking their orders directly from bin Laden, or that they even need his money. The terrorists operate in diffuse and loosely connected cells and self-finance by selling drugs and stealing.

The exemplars of the new kind of terrorists are the followers of the Armed Islamic Group, or GIA, as it is known after its French initials. The GIA has been one of the most violent factions in the Algerian civil war that began in the mid-’90s. Many GIA members sharpened their fighting and bomb-making skills in terrorist training camps in Afghanistan, where bin Laden operates. But, too weak to topple Algeria’s military regime, many fled to Paris, where the GIA was implicated in some bloody subway bombings in 1995 and 1996; to London, and to French-speaking Montreal, where a gang of GIA veterans stole laptops and mobile phones out of cars.

During the fighting in Algeria, the GIA generally avoided killing Americans, even though other Westerners were fair game. Now, however, it seems that the GIA, or a faction of the GIA, has targeted the United States–where authorities are scrambling to catch the plotters before they strike. The manhunt began on Dec. 14, when an alert Customs inspector spotted Ahmed Ressam as his car (smuggling the makings of very sophisticated bombs) came off the ferry from Canada to Washington state. Ressam’s phone records offered leads; the FBI, armed with a secret court order, began tapping phones in a half-dozen cities. Canadian authorities found the fingerprints of a possible confederate, Abdel Dahoumane, 32, in Ressam’s hotel room, but a manhunt has so far failed to find the suspect. A woman named Lucia Garafalo was detained as she crossed the Canadian border into Vermont. Though she claimed to have only $8 in her checking account, she had somehow managed to afford five trips to Morocco, two to France, two to Germany and many to Italy and Libya. Investigators aren’t sure what, if any, role Garafalo plays, except that she and Ressam “have been talking to some of the same people,” said an FBI source. A more suspicious figure is Abdel Ghani, the man arrested in Brooklyn last week. Investigators found a torn plane ticket in the garbage that would have put him in Seattle at the same time as Ressam. To do what? The Feds aren’t sure. One informant told the FBI that Ghani was to pick up Ressam’s bomb-laden car and leave it in a parking lot for another confederate.

Both Ressam and Ghani may be low-level “mules” assigned to transport the bombs so others may set them off. The FBI is looking for a larger plot, possibly tied to bin Laden. Investigators say that Ressam recently visited an Afghan training camp believed to be controlled by bin Laden. An FBI document that was described to NEWSWEEK claims that attendees at a conference of terrorist groups in Afghanistan in November 1997–co-hosted by bin Laden–included “U.S. attendees” from New York, Illinois, Indiana and North Carolina. All expenses, the document notes, were paid for by Afghanistan’s ruling Taliban group.

Does that mean bin Laden has a network ready to strike? In Washington, where funding for counterterrorism has almost doubled, to $10 billion, in the last five years, and where the CIA and the FBI, after years of feuding, are cooperating better, the answer is: nobody really knows. For the FBI and the CIA, used to fighting hierarchical, monolithic foes like the Mafia and the KGB, chasing the “new terrorism” is frustrating. We will find out soon enough if they failed.