There are two wars taking place in Iraq right now–the one Americans are watching on television and a wholly different version of reality being broadcast throughout the Middle East. While U.S. programming concentrates on military achievements and the certainty of victory, Arab and Muslim TV news focuses on victims, especially children–grisly images of the dead and dying and maimed. The bitterness evoked by this war is such that even benign acts of charity are tainted in the eyes of many Muslims and Arabs. “It’s humiliating to see a soldier giving a piece of candy to a poor child,” says Khalaf Haddadin, general manager of a contracting company in Jordan. “Maybe in the States these images are convincing, but the Iraqis don’t need biscuits [cookies]. They need for soldiers to stop killing their children.”

The shock waves from the American and British onslaught against Saddam Hussein have shaken even the most remote corners of the Middle East. And while the American public may believe–and share–the administration’s hope that this armed effort will lead to a more stable and democratic region, the young and the old, the poor and the rich, the educated and the illiterate of the Muslim world are united in disbelief when they hear the Bush administration state its altruistic goals. Islamist demagogues are calling for suicide attacks, and radicals of every stripe are competing to hijack the anger engendered by this war. Muslim leaders friendly to the United States, from Rabat to Rawal-pindi, are trying to ride out the storm. “I thought all of this was behind us,” says a bitter Jordanian official who’s usually regarded as a close friend of Washington. “I thought our kids wouldn’t have to grow up talking about wars the way I did–1967 and 1973 and 1982. But now you’ve done it. You’ve f—ed another generation of Arabs.”

Does Arab anger matter? Before the war began, Saddam was widely considered a has-been and a thug. But the outpouring of nationalism that has greeted the Iraq invasion is not the same as support for its dictator. Hatred of America and its effort to occupy and remake an Arab country is sure to linger. And even if Saddam is quickly captured or killed, the prolonged occupation of a country the size of California could easily leave American forces vulnerable to guerrilla-style attacks. Already several thousand would-be fighters have flocked to Iraq as they once did to Afghanistan, Bosnia and Chechnya, hoping for a righteous confrontation. One such group reportedly battled GIs in marshes on the outskirts of Baghdad last Saturday.

The Bush administration, although disappointed that Saddam’s regime didn’t collapse immediately, still believes that a relatively quick victory, combined with humanitarian aid and the installation of a pluralistic, fair-minded government, can shift the tide of Arab opinion. But that may be wishful thinking in a region with old grievances. The British conquest and occupation of Iraq from 1916 to 1921 is not remembered fondly by the Iraqis. Israel’s occupation of Palestinian lands is neither accepted nor forgiven by most Muslims. It’s a history that even the children know–and internalize. Nine-year-old Yara, in an Orthodox Christian school in Jordan, sums up as well as anyone the Arab viewpoint. “I’m getting very upset seeing little kids getting shot,” she tells a reporter who visits her fourth-grade class in Amman. “From the bottom of my heart I hope [the Iraqis] win this war, and we should help them.” But if the war ends next week, won’t it be forgotten a year from now? Another little girl raises her hand. “A year from now maybe we will forget this war,” says 10-year-old Nivin, “but the effect will still be in our minds.”

If Washington doesn’t want to create a new generation of America-haters, then it will have to alter Arab perceptions–and avoid creating the impression that its Army is an occupying force. That suggests that the United States and the United Kingdom may have to get out of Iraq, and fast. Yet before that can happen, the Western allies must rid Iraq of its tyrannical elements and install a solid and stable government. Doing both will take time. That is the dilemma facing Washington. “Put simply,” warns a recent report from the Council on Foreign Relations, “the United –States may lose the peace, even if it wins the war.” Thus far, U.S. officials have drawn up lots of plans, but there’s a lot of confidence-building, as well as nation-building, to be done.

American leaders may be encouraged by the fact that Coalition forces are now being cautiously welcomed in some parts of Iraq. There have been no cheering crowds, but last week some Iraqis smiled and waved at U.S. troops rumbling past their neighborhoods on the way to Baghdad. As U.S. forces moved into the holy city of Najaf last week, splits opened among Shiite Muslim authorities about how the faithful should treat an occupation.

But influential voices predict trouble. Muhammad Hussein Fadlallah, who lives in Beirut, denies that he ever was, as U.S. officials charge, the “spiritual leader” of Hizbullah terrorist cells that launched suicide bombings against Americans in Lebanon 20 years ago. But nobody doubts his authority. “This war has united the Islamic world from border to border against the United States,” Fadlallah told NEWSWEEK. “If more massacres take place and if more occupation is seen, I fear that we will witness a wave of terrorism that no one will be able to control.”

The impact of this conflict is already apparent in Pakistan and Afghanistan. Radical mullahs, some recently released from jail, have organized or participated in a series of massive demonstrations against Pakistani President Pervez Musharraf and the United States. They’re confident they can win support from junior and middle-ranking officers in the Pakistani Army who are infuriated by the war. The Taliban, meanwhile, are regrouping and reinvigorated. The remnants of Mullah Mohammed Omar’s forces have stepped up efforts to attack the Afghan government and American soldiers. Jalal Shah, a former Taliban official who is active in the armed anti-U.S. resistance in Afghanistan, rejoiced at the news of the American war in Iraq. “The attack will make Muslims more aggressively anti-American in Afghanistan, Pakistan and throughout the Muslim world,” Shah told NEWSWEEK’s Sami Yousafzai in a clandestine meeting near Peshawar. “Now more young Afghans will want to join our jihad against the U.S. and more older people will want to contribute money to our cause.”

The crisis has many leaders in the region on edge–afraid not only of American military power but of their own people’s anger. In the Israeli-occupied West Bank and Gaza, Yasir Arafat has asked his Fatah movement’s street leaders to tone down protests and keep his picture from appearing next to Saddam’s. “He’s trying to minimize the protests,” says Mohammed Abdel Nabi al-Laham, a Fatah functionary in Bethlehem. An infamous militia linked to Fatah, Al Aqsa Martyrs Brigades, declared it would suspend attacks in Israel until the war ends in Iraq. But that didn’t stop another group, Islamic Jihad, from wounding scores of Israelis in a suicide attack on a cafe in Netanya and describing the atrocity as “a gift” to the Iraqi people.

Jordan’s King Abdullah is under immense pressure. He felt compelled last week to deny once again that his country is being used to launch operations against Iraq, although Baghdad and many of his own people are convinced that it is. “No country has supported Iraq like Jordan, and we have said no to attacking Iraq when many said yes,” the king insisted. Egyptian President Hosni Mubarak, for his part, has maneuvered frantically to undermine support for Nasserites and leftists who’ve led massive protests against the Iraq war. He’s even made overtures to the outlawed Muslim Brotherhood, trying to play one extreme against the other so the middle can survive. “When it is over, if it is over, this war will have horrible consequences,” Mubarak told Egyptian soldiers in Suez last week. “Instead of having one bin Laden, we will have 100 bin Ladens.”

The war that the United States start-ed last month may have been launched with legitimate goals–to depose a brutal dictator with weapons of mass destruction. But in the Arab world, this conflict stirs up deeply rooted feelings of insult and insecurity. And it won’t end until millions of Muslim kids no longer sit in front of their televisions watching, thinking and learning to hate.