Independent : American excess: A Wall Street trader tells all

Wednesday, April 29, 2009

American excess: A Wall Street trader tells all

Fine wines, lobster lunches and million-dollar salaries – life as a Wall Street shark was thrilling at first. But amid the extravagance, Philipp Meyer was sickened by a moral deficit at the heart of America’s financial system

April 27, 2009

I’d been working for the bank for about five weeks when I woke up on the balcony of a ski resort in the Swiss Alps. It was midnight and I was drunk. One of my fellow management trainees was urinating onto the skylight of the lobby below us; another was hurling wine glasses into the courtyard.

Behind us, someone had stolen the hotel’s shoe-polishing machine and carried it into the room; there were a line of drunken bankers waiting to use it. Half of them were dripping wet, having gone swimming in all their clothes and been too drunk to remember to take them off. It took several more weeks of this before the bank considered us properly trained.

I didn’t fit the typical profile of a trader. I was an English major working on a novel at night. Most everyone else was a maths or economics major, most everyone else had relatives or family in banking. I’d spent a year walking around studying flashcards with maths problems, multiplying random licence-plate numbers in my head, just to prepare for the interviews. I memorised The Wall Street Journal every morning. I didn’t care what I had to do. At Cornell University it was well known that after five years on Wall Street, you could expect to be making half a million a year in salary and bonus; after 10 years you could expect a million or more. I had 60 grand of university debt and my parents had no retirement. I needed that money.

UBS apparently thought pretty highly of me, because despite my lack of a financial background, they put me onto the derivatives trading desk. This was a coveted spot - the derivatives traders were viewed as the elite - the baddest of the bad-asses. Derivatives are financial contracts, the value of which is based on (derives from) something else, say the price of a stock or the price of a bushel of wheat. They were originally created to provide stability and allocate capital to industry, farmers, and the like, and, for a long time, derivatives allowed businesses to eliminate certain financial risks, say in currency, which provided stability to the business, its management, and its workers. If you were a factory worker back in the day, you benefited from your employer’s use of derivatives to smooth out their cash flows during the year, hedge against the risk of selling goods abroad. For about a hundred years, derivatives were a sort of lubricant in the world financial machine.

By the time I arrived on Wall Street in 1999, the link between derivatives and the real world had broken down. Instead of being used to reduce risk, 95 per cent of their use was speculation - a polite term for gambling. And leveraging - which means taking a large amount of risk for a small amount of money. So while derivatives, and the financial industry more broadly, had started out serving industry, by the late 1990s the situation had reversed. The Market had become a near-religious force in our culture; industry, society, and politicians all bowed down to it.

It was pretty clear what The Market didn’t like. It didn’t like being closely watched. It didn’t like rules that governed its behaviour. It didn’t like goods produced in First-World countries or workers who made high wages, with the notable exception of financial sector employees. This last point bothered me especially.

I’d grown up in a working class neighborhood in Baltimore, a place hard hit by the offshoring of numerous heavy industries - steel, textile, shipbuilding. My parents weren’t mill workers - they were recovering hippies - but we were always struggling for money and so my brother and I lived a sort of split existence. Inside the house, I read constantly and my brother listened to classical music. Outside the house, like all the other kids in the neighbourhood, we got into fights and caused trouble. At 16 I dropped out of school and spent five years working as a bicycle mechanic and volunteering in a Trauma Centre before ultimately deciding to go to university. I earned high marks at various local colleges and eventually, after three tries at applying to the Ivy League, I got into Cornell.

My first job out of Cornell was on the trading floor at UBS. So when news would hit the wire about an American company closing a domestic factory, I felt a good deal of conflict as I watched the company’s stock price go up as a result. Those sorts of factory closings had ruined my neighbourhood, my city, and many of the people I’d grown up with. I was not alone in this feeling, but there were not many of us, either. One of my British friends from the training programme, who later became a currency trader, once told me: “I mean Christ, mate, every time they close a factory in Wales the goddamn market goes up. The whole system’s a little fucked, don’t you think?” And of course it was. The question was how to deal with it.

The easiest thing was buy into the system, convince ourselves that there was no other way to live. A few semesters worth of economics classes certainly helped; the in-house economics classes taught by the bank helped even more. The financial markets operate on the principle that, at our core, we’re all basically shit: selfish, self-interested creatures. There’s a whole branch of economics devoted to proving that if you help someone, say, run in front of a speeding train to push another person out of the way, you are actually acting out of self-interest, not altruism; that what most of us would consider humankind’s cardinal virtues - love, honor, compassion - do not actually exist.

The idea that we’re nothing more than selfish animals is an attractive philosophy to a person pulling down a few million dollars a year. It is a philosophy that negates guilt. The guilty feeling a normal person gets while visiting a Third World country is the same feeling a senior investment banker gets when they see a working class neighborhood in Birmingham or Philadelphia. When your paycheck could cover the salaries of a few hundred nurses or teachers, you need some explanation for why that’s okay. The only one that really works is that life is a pure meritocracy. That whether rich or poor, we’re all getting what we deserve.

The fact is, I became pretty good at making this argument myself. Until a roommate of mine, a guy named Mark Brewin, asked me: “So is that really what you want to be? A selfish animal?” “It’s not like we have a choice,” I said. “No,” he said. “You always have a choice. It’s just easier to pretend that you don’t.” Ouch. The strangest thing was, this thing I’d wanted for so long, this chance to become wealthy, was causing me more internal conflict than anything I’d ever done. I began writing a second novel, about a kid from the provinces who comes to Wall Street and is both drawn in and horrified by the culture of excess.

I understood it well. I put on 45 pounds in my first year at the bank, and, as you might guess, it was not from eating McDonalds. Occasionally I ate stuff like sushi, but mostly it was steak. We went to the good places like Sparks, Peter Luger’s, and the Strip House. We tended to look down on chains like Morton’s and Ruth’s Chris-they were for car dealers or stock brokers, not traders. Regardless of where we ate, we ate in quantity. My standard strategy was to order half a dozen appetisers, plus a steak and lobster, plus a few desserts and much wine as I could drink, as long it was under a few hundred dollars a bottle. Followed by a digestif, typically a 30-year-old port. There’s not any way to justify this except to say I was trying to catch up to my colleagues. We would treat those restaurants like Roman vomitoriums. And it wasn’t the food so much as the wine. Being a junior employee, I couldn’t really order bottles that cost more than a few hundred dollars, but the senior guys could get nicer stuff - Opus One, Chateau Latour. As long as we were out with a client, the bank paid. I remember being stunned the first time I saw a dinner bill for ten grand. But that was just the beginning.

What it boiled down to was austerity for everyone else and rampant consumption for ourselves. I never saw anyone literally set fire to money, but I did drink most of a bottle of 1983 Margaux ($2,000).

The mornings after, with our thousand-dollar hangovers, my colleagues in corporate finance would set up deals and make a few hundred factory workers redundant. I helped build derivatives that funnelled income to offshore holding companies so rich people and big corporations didn’t have to pay taxes. We had lawyers on retainer in the Cayman Islands and Jersey – a quick phone call and it was all set, no more taxes. My guilt from doing this became so intense that on a whim I once went to a protest against the World Bank. I got sprayed with a little pepper gas and it felt good.

***

My conflicted feelings manifested themselves in a variety of other ways, most of which involved avoiding work - this seemed to make me less culpable. In addition to my trading duties, I’d got myself installed as head of recruiting for UBS at Cornell, a job my bosses were grateful to me for taking, because the last thing they wanted to do was worry about talking to kids at university. I loved it; it allowed me to return to the Cornell campus, the last place I’d really been happy with my life. I walked around Ithaca, worked on my novel in the library, interviewed undergraduates for jobs. Occasionally I’d spot one like me, liberal-arts with a type-A personality, the sort I knew would make it in banking. I’d give them interviews in which I tried to talk them into doing something else. But of course all they could see was the money, same as me.

Gradually, I was descending into the strange social isolation of my colleagues. I spent less and less time with normal people and more time with people from the bank. I could feel myself slowly detaching from reality as lived by the average citizen. Four nights a week I stayed home and wrote my novel but the other nights I went out with a vengance.

One evening, a close friend from the bank, an art history major from Princeton, took a bunch of recruits out with me. I did my normal trick of ordering nearly everything on the menu. There were piles of raw fish, shrimp, paté, sauces that had taken hours to prepare. It was far more food than anyone could eat and I could see some of the recruits were a little stunned at the quantities of uneaten shrimp and oysters being shovelled into the bin. I ate a big steak, put down a few bottles of red wine at $400-a-bottle and we hopped into a minibus we’d chartered for the night (gauche, but we couldn’t find a large enough limo). We stopped somewhere and bought a mixed case of Veuve Clicquot and Moet. Try the difference between these two, I demanded, but by then the recruits were all so drunk they barely touched it. I could tell they were getting a little scared. This stuff is bottom of the line, I told them. You ought to try the vintages. I downed at least two of the bottles in rapid succession. Some of the recruits would not look at me. They did not want to be there anymore. We stopped at a bar. I realised I was going to be sick, made sure my colleague had things under control, caught a cab, and promptly began vomiting out the window. Because of the quantity of wine and red meat I’d consumed, it looked like I was spitting up blood. The cab driver pulled over, certain I was about to die in his backseat. A finely dressed couple opened the door and I clambered out and vomited on their shoes. I don’t remember how I got home. The next morning I discovered a dozen cigars stuffed in my pockets, probably from the restaurant. I told my colleagues what had happened, looking for some moral bearing, secretly hoping to be chastised, but they all thought I was a hero. The vomiting on strangers was their favourite part. My boss, for fun, would sometimes throw cocktail olives, sushi, things of that nature, across the room in restaurants, always at people we didn’t know.

***

In addition to the physical effects - my ballooning waistline and cholesterol levels - I had become an extremely angry person. On the trading floor the best way to win an argument was with overpowering aggression. Right or wrong, you protected your PnL [profit and loss account] with the fury of the righteous. But of course this approach to problem-solving leaks into other parts of your life. I became a raving idiot when I got behind the wheel of the car, screaming at other drivers for the slightest infractions.

Meanwhile, I kept plugging away at the writing. Once every few months, when I really felt like treating myself, I’d take a sick day and stay home and write. Those were my best days. I was making good progress on the novel about the young trader with the lost soul. The bank had me on a management track, which meant I was being rotated in different areas, learning different skills. After a year of derivative structuring I was sent to the NASDAQ trading desk. I quickly discovered that NASDAQ traders worked much shorter days, 8 hours as opposed to 12, and I suddenly had an enormous amount of time to write. It was one of the luckiest things that ever happened to me, because writing was one of the few things that kept my life in perspective.

Near the end of my second year at the bank, I decided to take a week of vacation and rebuild the engine in my Volkswagen. Naturally, I didn’t tell my colleagues what I was doing because they would have thought I was insane. I drove down to Baltimore to a friend’s repair shop and spent the week working in a spare bay. It was satisfying to use my hands again, to be around people who didn’t talk about the stock market and I began to feel very acutely exactly how much I hated my job. Everyone hates their job, I reminded myself. You’re getting paid a lot of money to complain. Looking around at my friends in the shop, it occurred to me that by the time I became a senior trader, I’d be making more money every year than they would make in their entire careers. And for what? Basically, for helping to break apart the lives of the sort of people I’d grown up with.

Which brings me to my earlier point. One of the reasons we allowed the financial industry so much control over our lives, starting in the 1990s and continuing until the meltdown of 2008, is the propaganda smokescreen of The Market. This idea of the God-like Market - all-seeing, all-knowing, and beyond question - is what allows CEOs to put a few thousand people out of work while giving themselves a $40m paycheck. It’s what allows certain hedge fund managers to take home half a billion (yes - billion) in a good year, while schools and bridges fall apart.

In reality, The Market is nothing more than the people who comprise it. Access to trading markets is very tightly controlled - it is not like a shopping mall. And it is certainly not magic. It’s just people. A very small number of people, in fact.

To give some perspective, even as a junior trader I might get an order to put on a two million share position - that’s shares, not dollars - and I’d do it several times a day. Advertisements for online trading companies try to imply that the market is made up of people like your Cousin Vinny, who buys a hundred shares here and there, but the truth is that Cousin Vinny is irrelevant.

Markets are driven by a very small number of very large investors - traders at banks, hedge funds, and mutual funds - who drive nice cars and drink expensive wine. We need them - the financial markets, that is. They are a necessary part of modern civilisation. What is unnecessary, and extremely unusual, is that the people who run them are paid so disproportionately to the rest of us.

It is crucial to realise that what motivates those people - collecting their million or hundred million dollar bonuses - has nothing to do with the job they actually perform. People used to do it for a lot less and it’s not like there’s a shortage of candidates - I turned away 10 good recruits at Cornell for every one we hired.

The reason we’ve ended up in the spot we’re in today is not so much our failure to understand economics as our failure to understand human nature.

Give a small number of people the power to enrich themselves beyond everyone’s wildest dreams, a philosophical rationale to explain all the damage they’re causing, and they will not stop until they’ve run the world economy off a cliff.

It’s not that people in the City or on Wall Street are necessarily bad people, it’s just that they, like almost anyone, will do anything to keep their million or ten million dollar paycheck. They’ll creatively interpret data, they’ll understate risks, they’ll put the best spin on things. Some will lie, cheat, and steal. But most of them, like most of us, will simply resist looking at the world from any perspective other than their own. And if we are intelligent, we will keep a careful watch on them - both now and into the distant future.

Like any big decision, my choice to leave the bank felt pretty easy once I’d made it. My girlfriend at the time was considering going to law school at Harvard; I asked my boss and some other senior people to ask around for hedge fund jobs in Boston. But the moment I began to consider leaving UBS, it was like a dam breaking. I did not want another job in finance. I did not care about money. I cared about people, I cared about their stories. I cared about what makes us who we are.

I left the bank in late 2001, with my second novel partially written. By 2004, things were not exactly going to plan. I was broke and the second novel had been rejected by every literary agent in America. The book I’d spent three years toiling over turned out to be an apprentice-level work. It was a hard blow but I kept writing. I moved back to the old neighbourhood in Baltimore and took jobs that allowed me to reconnect with the people I’d grown up with - working in construction and driving an ambulance.

In 2005 I began a third novel, American Rust, about the way that our circumstances, whether poor or wealthy, can so completely shape our morality and our way of looking at things. I was fascinated by the lost generation in America - the people whose towns and hopes have been wiped out by outsourcing - people for whom the American Dream has ceased to be relevant. As Steinbeck did in The Grapes of Wrath, I wanted to show the inner lives, for better and worse, of the new lost generation. I wanted readers to think about exactly what it means to be human. What is at the core of us? Where do our morals come from? What differentiates us from the other animals on earth? What measures do we use to define our friends and family and how far are we willing to go to protect them?

Of course these are questions for broader society, not just literature. Maybe it’s only in crises like this that we get shaken up enough to ask ourselves those larger questions - who are we, what is important to us, how should we define our humanity. The answers we choose will determine the sort of world we live in for the coming decades.

‘American Rust’ by Philipp Meyer (£12.99) is published by Simon & Schuster. To order a copy for the special price of £11.69 (free P&P) call Independent Books Direct on 08700 798 897, or visit www.independentbooksdirect.co.uk

Daily News (Pakistan) : ‘Do More’ mantra

Friday, April 24, 2009

‘Do More’ mantra

Khalid Khokhar | April 24, 2009

THE linking of most recently alleged terrorist plot with Pakistan unearthed in UK, is the manifestation of old-aged archetypal apprehension that “the imprints of every major act of international terrorism invariably passes through Pakistan”. The westerners believe that virtually all the participants of 9/11 tragedy had been trained, resided or met in, coordinated with, or received funding from or through Pakistani seminaries called as “Madaris”. The spat started with British Prime Minister Gordon Brown accusing Pakistan of not doing enough to control terrorist acts. The Britain police arrested 11 Pakistani-born nationals on student visas in UK on the alleged planning to attack shopping centres and a nightclub in Manchester. However, after the examination of computers recovered from raids in Manchester, Liverpool and Clithere and their hard drives, MI6 cautiously admitted that there is no evidence of ‘Pakistan connection’ with the actual plot, thus causing a deepening sense of embarrassment to the worthy PM of a most technologically advanced country. It forced the Britain police to deport the arrested Pakistanis rather than charging them in a court. The father of one accused (Abid Naseer) in the alleged plot, attributed the charges to Western Islamophobia, saying his only crime is to have a beard and pray five times a day. As perceived by many in Britain and other Western countries, youth having long and untrimmed beards are viewed with suspicion as potential terrorists and extremists. To be sure, such labialization is unfair and uncalled for.

In 2005, Pakistani seminaries came under severe scrutiny when possible links of these religious Madaris have been alleged in 7/7 London bombings. During the course of investigation, it was revealed that at least two of the bombers had visited Pakistan in the months before the attacks. In the aftermath of the deadly attacks, the then, British Prime Minister Tony Blair called on Pakistan to crack down on extremist madrassas. There are lots of attack threats and signals rumbling all round the western circles from time to time. Again in 2009, Pakistan has been accused of not doing enough, whereas it is doing enough despite limited resources. What is the myth of al Qaeda “sleeper cells” in European countries? Are these alarms emanating from jihadist propaganda videos, coded message to al Qaeda cells, or just hoax? The Government is well set on its course to ascribe a more meaningful role to the madrassas and developing the madrassa students congruent to cultural norms of Pakistani society. After reviewing the veracity of these alarms, one is left with many unanswered questions. A global dragnet has tightened around al-Qaida, made possible by a broad coalition of 84 nations, all focused on the common goal of eradicating the terrorist threat that endangers all civilized nations. Since September 11, 2001, 70 percent of al-Qaeda senior leadership and more than 3,400 lower-level al-Qaeda operatives have been detained or killed in over 100 countries. The al-Qaeda organization has been gravely wounded and is on the run. Pakistan has deployed up to 120,000 military and paramilitary forces in FATA and killed/captured hundreds of suspected al Qaeda operatives. Pakistan has made “significant” progress toward eliminating the safe haven for foreign fighters in the FATA over the past seven and a half years, capturing scores of key leaders. Pakistan, being the frontline state in the war on terror, is committed to weed out terrorism of all sorts from its soil. The objective was to deny a safe haven to al Qaeda and Taliban elements inside Pakistan. Despite substantial sacrifices rendered by Pakistan, still US counter-Terrorism department believes that “Washington rarely gets all of the help it wants from allies like Pakistan in efforts to hunt down violent extremists”.

In assessing al Qaeda and its cohort’s capabilities, many believe that US counter efforts have weakened al Qaeda’s central leadership structure and capabilities to the point where al Qaeda can not coordinate attack of 9/11 magnitude. Therefore, counter-efforts should focus more intently on homeland security, stressing such measures as improving airline security, establishing enhanced security measures for passenger train travel, and expanding security of western ports. The Britain’s Terrorism Act-2000, which authorizes indefinite detentions of immigrants; search a home or business without the owner’s or the occupant’s permission or knowledge; allows to search telephone, email and financial records without a court order; and the expanded access of law enforcement agencies to business records, can auger well with the objective of combating the scourge of terrorism. However, the Britain’s student visa system has some bugs. It is appropriate to mention here that more than 2,100 universities, independent schools and colleges normally apply to accept international students. Each institution was supposed to be assessed or visited by UK Border Agency officers as part of the vetting process. Foreign students bring with them 10 billion pound boast to the economy which the Government is keen to encourage. This leads to soft visa policy and thousands of bogus students were free to enter Britain despite new laws aimed at tightening controls on immigration. The British government issues around 10,000 student visas a year to Pakistanis, and over 50, 000 Pakistani students are presently in Britain, ostensibly studying. It was revealed that hundreds of colleges approved by the Home Office to accept nonEuropean Union (EU) students have not been inspected by it’s officers. It has also emerged that the vast majority of non-EU students would not be interviewed by the Home Office but admitted on the basis of written applications and evidence of sponsorship, educational qualifications and bank statements. They then register at the college or university that originally gave them admissions to enable them to apply for visas. However, the reality is that in a large number of cases, these institutions are little more than fronts that function only to make money from these young men and women who are seeking jobs for a better life in Britain. Another reason may be that the Europeans allow “rogue element” to seek shelter in foreign countries on the pretext of “political asylum”. The European countries, being the staunchest ally in the US-led war on terror, are unwittingly protecting and harbouring such dangerous terrorists wanted in many terrorist acts in Pakistan. Today, the continuation of militancy is a devastating outcome of western’s “human rights” policies.

The International terrorism, no matter when, by whom, where, and in what form, is a dangerous threat to the world peace. This requires mutual cooperation from all peace-loving countries. Every country should adopt “uniform strategy” in condemning and fighting terrorism resolutely. Since 2005, UK took into account how terrorism in Pakistan may affect Britain and its Muslim population. The British Metropolitan Police Counter-Terrorism Command arrested some UK nationals of Pakistani origin on the charges of “commissioning, preparing or instigating acts of terrorism”. Consequently, most of the terrorist organizations closed their offices in UK and fled away to some soft destinations, like Sweden, Italy, Norway, etc. Now, there is a strong need to take appropriate programmes and initiatives to reach out to people/organizations harbouring terrorism. All the foreign-based organizations should be taken to the task by the counterterrorism authorities of the respective country. All the websites operating in western countries responsible for fanning extremist sentiments should also be banned. The western democracies have to set aside their soft policy and should be more aggressive to conduct covert operations against masquerade terrorists exploiting the western doctrine on human rights to their benefit. International terrorism has jolted the whole world which is faceless and has no territory and is fighting its own war against terror. Pakistan itself has suffered from terrorism. Pakistan condemns terrorism in its all forms and manifestations. The public blame game only sours relations. The UK officials are equally irritated by High Commission’s statement as Islamabad is not happy with the statement of Prime Minister Gordon Brown because despite providing full co-operation in the war against terrorism, his attitude was not fair. Nevertheless, it calls for collective efforts by the international community against terrorism, instead of seeking scapegoats and blaming each other. UK and Pakistan should not worry about who is to blame, and more about how to rectify the emergent problem.

Times : All suspects in 'student terror plot' released

Wednesday, April 22, 2009

All suspects in 'student terror plot' released

Nico Hines and Russell Jenkins | April 22, 2009

All 12 suspects arrested in a security operation to thwart what the Prime Minister called “a very big terrorist plot” have been released without charge.

Eleven of the men - all Pakistani nationals - face being deported after they were transferred into the custody of the UK Borders Agency.

The failure to bring charges against any of the men came after police released the final two suspects they had in custody this morning.

Last night they freed nine men, aged between 22 and 38, after 13 days detention. An 18-year-old student was transferred to the custody of the UK Border Agency after three days in detention.

Mohammed Ayub, a lawyer for three of the men, called for an independent inquiry into Operation Pathway and said their deportation orders would be challenged.

“Our clients have no criminal history, they were here lawfully on student visas and all were pursuing their studies and working part-time,” he said.

“They are neither extremists nor terrorists. Their arrest and detention has been a serious breach of their human rights. As a minimum they are entitled to an unreserved apology.”

Responding to criticism of the police operation, Gordon Brown’s spokesman said: “Both the Home Secretary and the Prime Minister believe they are doing an excellent job in continuing to protect the public from terrorist threats.

"The Government’s highest priority is to protect public safety. Where a foreign national poses a threat to the country, we will seek to exclude or deport them where appropriate.”

The investigation into alleged al-Qaeda activity in the North West involved 14 properties in Manchester, Liverpool and Clitheroe, Lancashire, being searched by specialist teams.

Four uniformed police officers stood guard outside 36, Galsworthy Avenue, in Cheetham Hill where two of the terror suspects were arrested in an armed swoop two weeks ago.

The sunlit street was deserted apart from a few pressmen and one passer-by who shouted aggressively: "Go home - [it's] all over now."

There is, however, deep disquiet about the arrests in the neighbourhood among residents who say that the police has a record of making dramatic terror swoops, disrupting and upsetting the local community but subsequently releasing the suspects for lack of evidence.

Locals cited the the behaviour of Lancashire Police in February when nine men from Burnley and Blackburn on a humanitarian convoy were arrested on the M65 near Preston and later released without charge.

GMP distributed a letter to local residents in an attempt to explain their position.

Afzal Khan, the Labour councillor for Cheetham Hill, said: "I am deeply concerned. On the same day of the arrests people on the streets were saying straight away that they will find nothing and that is is all political. This has only reinforced that view".

The arrests were brought forward by 12 hours after Bob Quick, Scotland Yard’s head of counter-terrorism, accidentally disclosed details of the raids to Downing Street photographers while on his way to brief Gordon Brown and Jacqui Smith, the Home Secretary.

Mr Quick, Assistant Commissioner for Specialist Operations, resigned, admitting that he had compromised a high-level security operation. Ms Smith told the House of Commons this week that the error had not damaged the operation and that the only impact had been that the raids had been brought forward “by a matter of hours”.

However, The Times understands that even before Mr Quick quit there were furious disagreements between Scotland Yard, which is supposed to have national responsibility for counter-terrorism, the North West Counter-Terrorism Unit, led by Greater Manchester Police, and MI5.

Security sources said that the arrests were premature and complained that police had panicked after picking up intelligence “chatter” that appeared to discuss timings and targets. Some of the suspects were allegedly under surveillance while photographing and filming at Manchester shopping centres and a nightclub.

It was hoped that the arrests and searches would produce evidence of bomb-making activity or components.

At one point a block of flats in Liverpool was evacuated but no explosive material was found. Attention later turned to the forensic examination of the suspects’ computers, but sources say that nothing has been found which can incriminate the men.

The Chief Constable of Greater Manchester Police, Peter Fahy, said this morning:

“I do not feel embarrassed or humiliated by what we have done because we have carried out our duty. There’s been no disagreement between us and the security services.

“This has been an extremely complex investigation that has involved officers working closely with other agencies to gather and examine large amounts of evidence.

“We had a duty to act on 9 April to protect the public and a subsequent duty to investigate what lay before us."

Daily Times : Dead men plotting terror?

Thursday, April 16, 2009

Dead men plotting terror?

UK officials believe foiled attack was planned by Rashid Rauf

Daily Times Monitor | April 13, 2009

WASHINGTON: How could Rashid Rauf, a “high value” Al Qaeda target, be plotting terrorist attacks in Britain in April 2009 – as claimed by the British authorities – if he was killed months ago in a famous drone strike in Waziristan, as US officials claimed, in November 2008, the Nesweek magazine is asking.

According to one UK expert, some British investigators as well as Rauf’s family think that he may have survived.

Rauf, a former British resident, was allegedly a central figure in an August 2006 plot to blow up trans-Atlantic airliners. The plot was foiled after Rauf was arrested in Pakistan. But in December 2007, he escaped from custody. US officials suspected ‘inside’ help and the White House was delighted when a Predator operation supposedly took him out. Soon afterwards, however, Rauf’s Pakistani lawyer asked authorities to produce the body which they were apparently unable to do.

US officials talking to the Newsweek said US agencies still believed Rauf was killed in the strike.

“While it is not 100 percent confirmed,” said one of the officials, “there are good reasons to believe Rashid Rauf is dead.”

“And even if he’s dead,” the magazine says, “US and UK officials said it’s possible the Easter plot was hatched prior to November 2008 — meaning that Rauf’s reach may extend beyond the grave.”

Telegraph : UK should distance itself from US drone attacks in Pakistan, says minister

Tuesday, April 14, 2009

UK should distance itself from US drone attacks in Pakistan, says minister

Britain should distance itself from US missile attacks on al-Qaeda strongholds in the tribal areas of Pakistan, a Government minister has said.

By Duncan Gardham, Security Correspondent | April 12, 2009

Sadiq Khan, the minister for community cohesion, said Britain needed to rebuild its reputation in Pakistan where anger is mounting over the attacks launched by unmanned drones.

Mr Khan, who was in Pakistan on an official visit when counter-terrrorism raids took place in Manchester and Liverpool last week, said many young men there were angry with the attacks which have been blamed for killing innocent people as well as terrorists.

Rashid Rauf, the man said to be behind the alleged plot to target shopping centres in Manchester, was reported by the US as being killed in one such attack last year.

The attacks, which have been stepped up in recent months, are highly controversial in Pakistan, partly because they are seen as an American incursion on Pakistani sovereignty.

Mr Khan said the Government needed to make clear that Britain's foreign policy was different from Washington's.

The minister said: "In Islamabad, I spoke to university students about being British and Muslim, the values we share in the UK and the freedom to practise faith freely, be treated equally, protected against discrimination, and be active citizens with the freedom to voice our concerns and disagree without fear.

"In return, I listened to the anger and pain over the challenges that young Pakistanis growing up in Pakistan face, including the anger and frustration over US drone attacks.

"It is clear, in many Pakistanis' eyes, the UK is considered in the same terms as the US.

"One of the lessons of the Iraq war is that we need to ensure we are better at explaining our foreign policy, especially when it is distinct and different from [policy in] the US."

Mr Khan was later forced to clarify that he believed Britain needed to “stand shoulder to shoulder with those who are fighting terrorism” including both the US and Pakistan.

The Times : Ghost in the terror machine

Tuesday, April 14, 2009

Ghost in the terror machine

Last week's raids were the result of a long investigation into a wider campaign plotted by an Al-Qaeda chief before his apparent death

David Leppard | From The Sunday Times | April 12, 2009

Early last Wednesday evening, Phil Harrow, a blood service courier from Toxteth, Liverpool, was sitting in front of his computer in his living room, his attention occasionally distracted by the sounds of the local children playing football on the street outside his front window on Cedar Grove.

At about 5.30pm, the peace was shattered and the children scattered in terror. “Eight armed officers, dressed in black from head to toe and wearing body armour and ski masks, jumped from an unmarked white van, screamed at the children to get out of the street and battered their way into the house two doors down from mine,” recalled Harrow.

Within minutes three unmarked police cars and four large yellow police vans had cordoned off the street and about 30 more officers were shouting at residents to stay indoors with their doors and windows shut.

Three Asian men were arrested and quickly driven off. The officers also took away a blue Nissan Micra and a black Vauxhall Corsa after neighbours told them the vehicles belonged to the men.

It was a pattern repeated across the city and the northwest of England as police swooped simultaneously as part of Operation Pathway, which was targeting an alleged Al-Qaeda-driven terror plot aimed at unspecified targets in Britain.

Elsewhere in Liverpool, a man was hauled out of a flat above an off-licence on Earle Road, Wavertree, about half a mile from Cedar Grove. At Liverpool John Moores University across the city, a student was dragged from the library and arrested.

In Manchester two men were picked up in a flat in the Cheetham Hill area, another couple were seized in a cybercafe and a fifth man was arrested on the M602 motorway. Two other men were held in Clitheroe, Lancashire, where they had been staying at a local B&B.

The arrest of the 12 men — 11 Pakistanis and one Briton — had been rushed forward because of a career-ending blunder earlier that day by Bob Quick, the Metropolitan police assistant commissioner who was Britain’s chief anti-terror officer.

Quick had been running late for a morning meeting with Gordon Brown at No 10, at which he was to tell the prime minister about the raids which had been planned for 6am the next day. In the taxi on the way, he was reading a document headed Secret: Briefing Note Operation Pathway. Quick was in such a rush that he forgot to put the document back in its buff folder before he got out of the cab.

A photographer snatched a picture of the document which was then transmitted to media outlets around the world. The operation had to be hastily brought forward by 12 hours.

Thankfully, Quick’s error had serious consequences only for himself — he resigned on Thursday morning — but it added unnecessary drama and danger to an operation that had already been a close-run thing — and which security sources fear is part of a much bigger threat.

THE trail to the Manchester raids is thought to have begun last December with the arrest of 14 suspected Al-Qaeda terrorists by Belgian police.

Officials believed a suicide bombing aimed at a two-day summit of European leaders, including Brown, was imminent after learning that one of the suspects had received a green light from his paymasters abroad.

During their detention, few of the men were prepared to co-operate with the Belgian authorities but one — whose identity remains a closely guarded secret — was willing to talk. In a series of interviews he described how he had been personally “tasked” to carry out a suicide attack in Belgium. His instructor was Rashid Rauf, a fugitive on the run from British police in Pakistan.

The would-be suicide bomber said that the Belgian plot was just one of a number of large-scale attacks that Rauf had planned across Europe. The targets were unidentified cities in Belgium, France, Holland and the UK.

Interviewed later by a member of MI5, the supergrass said that all he knew was that Rauf had dispatched a mastermind — whose pseudonym he gave — to a British city to make preparations for an attack. His tip-off was vague but it sparked one of the largest manhunts in MI5’s recent history.

Rauf, who was born in Pakistan but was brought up in the Midlands, has already been linked to a series of alleged high-profile Islamist terror plots, including the failed July 21 suicide bomb plot that targeted London in 2005.

Despite this known track record, Rauf’s real importance had been underestimated. About four years ago he became Al-Qaeda’s director of European operations.

Last November Rauf was reportedly killed when three American Hellfire missiles from a CIA predator drone destroyed a mud-built bungalow in a village in North Waziristan, in the lawless tribal lands that span the border between Pakistan and Afghanistan.

Aerial photographs taken by the Americans after the missile strike show a body, originally thought to be Rauf’s, covered in a shroud being carried from the rubble. But original assessments that he is dead have been revised. “There is nothing definitely to say he’s actually dead,” said a senior western intelligence official last week.

“It may take a long time to find out. We honestly don’t know.”

Pakistani intelligence officials remain convinced that he was killed in the strike.

A few months earlier Rauf had sent several cells to Europe to carry out a series of linked attacks which were driven by Al-Qaeda’s hatred for Barack Obama — “a house negro” as Osama Bin Laden’s deputy has called him. Informed sources said it is now believed that the alleged northwest cell was part of this Europe-wide network.

The suspected members of the northwest cell had first came to the attention of MI5 about two months after the thwarted Brussels attack in December.

At any given time MI5 monitors about 2,000 people in Britain who form an estimated 230 networks suspected of links to violent extremism. Each individual is subject to a sliding scale of monitoring depending on the agency’s assessment of the threat they pose and how close they are thought to be to “attack planning”.

Each week a committee of senior MI5 officials meet at the agency’s headquarters in Westminster to review the status of each operation, upgrading and downgrading different investigations as appropriate.

Well placed officials say the alleged northwest cell had been the subject of investigation for several weeks since January. About a month ago that was suddenly stepped up after fresh information indicated that the members of the cell might be serious about attack planning. Operation Pathway was moved to the top of MI5’s priority list. Hundreds of police and MI5 officers were assigned to the investigation.

A number of suspects, many of them Pakistanis on student visas, were put under full-time surveillance. Their homes were bugged, their telephone calls were intercepted and they were followed night and day by officers from MI5’s A4 surveillance division.

This department specialises in covert surveillance. At terror camps in Afghanistan and the tribal areas of northwest Pakistan, Al-Qaeda terrorist recruits are routinely trained in counter-surveillance tactics. This can include switching back on their route, stopping suddenly in the street and generally being aware of everybody around them.

To circumvent this, MI5 employs people who look the opposite of the stereotypical spy. The agency has at its disposal an army of elderly women — many in their sixties and seventies — and young mothers with babies in prams.

There is also a range of James Bond-style devices which are the agency’s most closely guarded secrets. It is rumoured, for example, that MI5 has developed a colourless chemical which is “painted” on a suspect’s clothing or shoes during a covert entry of the suspect’s home while he or she is out. The suspect will then leave a trace of the chemical wherever he goes, allowing a trained MI5 dog to follow his trail.

It is not known whether any of these tactics were used in Operation Pathway. But about a fortnight ago surveillance officers reported that the suspects had been taking photographs of four locations in Manchester. These included the Arndale shopping centre, the smart shopping area of St Ann’s Square, the Trafford shopping centre and the Birdcage nightclub.

Critically, their e-mails were monitored — a highly sensitive task usually assigned in such operations to technical experts at GCHQ, the government’s eavesdropping agency at Cheltenham.

The turning point came about a week ago when a series of e-mails thought to have been received by at least one of the suspects indicated a specific timeframe for the alleged plot. The e-mails suggested that the cell had moved into the stage of attack planning. They showed a “window” for a possible attack of about five or six days from Good Friday. “Dates around the Easter holiday were mentioned,” one senior police source said this weekend.

Yet there remained serious gaps in the Pathway investigation. Despite the photographs, police say they had no definite evidence of the planned target. Neither had Pathway uncovered any evidence that the suspects had acquired explosives, arms or ammunition.

There was no indication, either, as to whether the planned operation was a suicide attack, or how many of those arrested would be directly involved and which of them were simply supplying logistical support such as purchasing materials or acting as drivers and reconnaissance scouts.

For MI5 officers running Pathway from the agency’s Northern Operations Centre (opened amid great secrecy last year in a northern city), these were good reasons to watch and wait. But the risks of letting the suspects run overrode that.

“There is always a challenge to balance the need to gather more intelligence with the need to protect the public. There was clear intent and signs of organisation, very clearly something was going on, so we acted to protect the public,” said a security source.

Early last week senior police and MI5 officers met at Scotland Yard and agreed that the suspected members of the cell should be arrested. The date for “executive action” was set for 6am last Thursday when the suspects would almost certainly be at home and asleep. But then came Quick’s unwitting intervention.

AS the police questioning of the arrested men continues at three separate locations, few details have emerged of their lives in Britain. Neighbours in Liverpool spoke last week of cars coming and going from addresses late at night and the playing of loud Islamic music from a flat occupied by one of the men, but the suspects appear to have had little interaction with people other than at work.

Two of the men worked as security guards at the Homebase DIY store in Clitheroe, but had been there for only two weeks. Two more were believed to have worked as contractors for Cargo2go, a delivery firm based at Manchester airport, because one of the men was driving one of the company’s vans when he was arrested.

However, Ian Southworth, a director, said yesterday that he was mystified at the suggestion. “All our drivers are owner-drivers. It could be a driver that used to work for us that’s left and sold the vehicle and the logo’s still on it, or it could have been a lost or stolen vehicle,” he said.

A number of the 11 Pakistanis arrested were from the tribal areas and had been admitted to Britain on student visas.

This has stoked up a political row, with Islamabad and Downing Street trading blows over who was responsible for lax checks on immigrants, especially those entering Britain on student visas which are notoriously abused.

Gordon Brown said Pakistan “has to do more to root out terrorist elements in its country”. The prime minister had said previously that two out of three terror plots uncovered by MI5 and police were hatched in Pakistan. But Wajid Shamsul Hasan, the Pakistan high commissioner, retaliated by saying the problem was “at your end”.

This weekend a senior immigration judge dismissed as “bluster” claims by Phil Woolas, the Home Officer minister, that the system for checking student visas had been recently tightened up and was “one of the best in the world”.

The judge pointed to the six-month closure, on security grounds, of the main visa office at the British high commission in Islamabad, which meant that cases were being channelled through an outpost in Abu Dhabi, 1,300 miles away. He said that at 50% of the appeals, by those on student visas refused entry to Britain, there was no Home Office representation. In many cases the only documentation produced as evidence was that provided by the appellant, “which can often be forged or inadequate”, said the judge.

His comments were echoed by John Tincey, chairman of the Immigration Service Union which represents border staff, who said that the proposed introduction of the e-borders system involving automated checks on visitors was fraught with danger.

“Foreign nationals could be allowed into Britain without being interviewed by an immigration officer,” he said.

“There is real danger that our immigration controls will be able to catch only those who are already known to the authorities and will be helpless to detect first-time terrorists and illegal immigrants.”

Chris Grayling, the shadow home secretary, said: “This is a completely shambolic system.”

THE arguments about the immigration system will continue for some time but this weekend the police priority was the continuing search of 10 properties in Manchester and Liverpool.

Yesterday police released an 18-year-old, the youngest of the suspects, into the custody of the UK Border Agency. They have 28 days to hold the 11 other men, who are aged between 22 and 41, before either charging them or releasing them.

The fate of Operation Pathway will hinge on whether they can gather enough evidence from the interviews and seized property for prosecutors to press charges.

Rauf’s plans for Europe-wide attacks leave intelligence agencies rushing to locate and defuse a group of ticking timebombs. Whether he is dead or alive, those ticking bombs are his real legacy.

Additional reporting: Kevin Dowling, Philip Cardy, Daud Khattak in Peshawar

The Times : Pakistani 'terror plot suspects' to be deported rather than charged

Monday, April 13, 2009

Pakistani 'terror plot suspects' to be deported rather than charged

Sean O’Neill, Zahid Hussain and Michael Evans | From The Times | April 13, 2009

Most of the Pakistani men arrested last week in an anti-terrorist operation will be deported rather than charged, senior counter-terrorism sources told The Times last night.

Officials in London and Islamabad said that Britain had begun seeking assurances about how the men would be treated if they were returned to Pakistan. “The British wanted to be reassured that if some of these men were deported they would not face torture,” an informed source in Pakistan said.

One of the 12 men detained, an 18-year-old, has been freed from anti-terrorist detention and is in the custody of immigration officials.

Investigators are concerned that they have not found any firm evidence linking the men to terrorist attack plans. A source close to the inquiry said: “There is already talk of coming up empty-handed and there is terrible infighting between the different forces involved.”

Operation Pathway, the codename for the inquiry, has already led to the resignation of Britain’s most senior anti-terrorist officer, Bob Quick, after he accidentally revealed details of the arrest plans to photographers in Downing Street. If it results in deportations rather than charges, it will also embarrass the Prime Minister, who said that the police were dealing with “a very big terrorist plot” and had criticised Pakistan for not doing more to tackle Islamist terrorism.

The latest discussions between London and Islamabad were disclosed as news emerged from Pakistan that its anti-terrorist agencies had been holding a British convert to Islam for two weeks. James McLintock, 44, was detained in Peshawar, from where many of the men arrested in Britain come, and is being questioned about helping British Muslim militants to make contacts in Pakistan.

Pakistani and British officials said that the arrest of Mr McLintock, from Dundee, was not linked to the continuing terrorism investigation in Britain. The last time he came to the attention of the British authorities, however, was in late 2003 when he was questioned by anti-terrorist police in Manchester, the city at the heart of the plot allegations.

The family of a man studying at Liverpool John Moores University said they believed that their son had been arrested and appealed for his release. Relatives of Mohammad Ramzan, from Dera in Pakistan, said that they had been unable to contact him since last week. Haji Hazrat Ali, his father, told Associated Press that Mr Ramzan, 25, travelled to Britain in 2006 and was studying for an MBA. Mr Ali said: “He is a very humble, gentle boy and always concentrates on his studies. I firmly believe he simply cannot be involved in any negative activity.”

The operation in Britain has been running covertly for several weeks and went public last Wednesday, within hours of Mr Quick’s blunder, with dramatic daylight raids in Manchester, Liverpool and Clitheroe, Lancashire. The remaining 11 detainees, 10 of whom are believed to be Pakistani nationals visiting Britain on student visas, are being questioned at police stations across the North of England.

Detectives have been granted a further seven days to detain the suspects, who range in age from 22 to 41. They can be questioned for a maximum of 28 days before they have to be charged or released.

The investigation is a joint operation between the North-West Counter-terrorism Unit, Scotland Yard’s counter-terrorism command and MI5, and involved Merseyside and Lancashire constabularies. The involvement of so many forces is said to have led to infighting and confusion over the command and direction of the inquiry.

Newsweek : A Dead Man Scheming?

Sunday, April 12, 2009

A Dead Man Scheming?

By Mark Hosenball | NEWSWEEK | Published Apr 11, 2009 | From the magazine issue dated Apr 20, 2009

It's a mystery what the head of Scotland Yard's anti-terrorism squad was thinking when he walked into the U.K. prime minister's office at 10 Downing Street carrying in plain view a "secret" report about Al Qaeda's attack planning. News photos of Assistant Commissioner Bob Quick's careless move compromised a police crackdown, forcing U.K. officials to swoop in and arrest 12 suspects—all but one of them Pakistani nationals—in connection with an alleged Easter holiday plot to attack shopping centers and a nightclub in northern England. Quick resigned the next day. Another mystery remains unsolved: whether Rashid Rauf, a "high value" Qaeda target during the Bush administration and one of the Easter plot's alleged masterminds, is alive or dead. U.S. officials believe that Rauf was killed just before last Thanksgiving by a CIA-operated Predator drone strike in Pakistan's lawless North Waziristan. But according to one U.K. expert who's been briefed on the case, some British investigators— and Rauf's own family—think he may have survived. (A U.K. spokesperson had no comment on the matter.)

Rauf, a former British resident, was allegedly a central figure in an August 2006 plot by U.K.-based terrorists to blow up transatlantic airliners. The plot was broken up after authorities in Pakistan arrested Rauf. But in December 2007, he escaped from custody as he was being transferred back to prison from a court hearing in Islamabad. (He allegedly fled via a bathroom window after his guards allowed him to stop for a prayer break; U.S. officials suspected an "inside job.") The White House was delighted when the Predator operation supposedly took him out. But soon after the missile strike, which U.S. officials said killed five men, including Rauf, his Pakistani lawyer claimed he was still alive and dared authorities to produce the body—which they were apparently unable to do.

Three current and former U.S. officials, who asked for anonymity when discussing a sensitive matter, told NEWSWEEK that U.S. agencies still believe Rauf was killed in the strike. "While it is not 100 percent confirmed," said one of the officials, "there are good reasons to believe Rashid Rauf is dead." In most Predator operations, officials in Washington have overhead video feeds that enable them to follow targets prior to a missile firing and to see bodies following the attack. But sometimes, another of the officials said, the evidence is more ambiguous. "If he is alive," the official added, "we should regard this guy as a serious threat to U.S. interests." And even if he's dead, U.S. and U.K. officials said it's possible the Easter plot was hatched prior to November 2008—meaning that Rauf's reach may extend beyond the grave.

© 2009

Telegraph : Terror plot: search for explosives

Sunday, April 12, 2009

Terror plot: search for explosives

The hunt for explosives linked to an alleged plot to blow up shopping centres in Manchester intensified yesterday.

By Duncan Gardham, Security Correspondent | April 10, 2009

Officers believe that the alleged plot was in its final stages and could have been planned for the Easter weekend but have yet to discover any bomb-making equipment.

In the past, terrorist cells have proven adept at hiding bomb-making materials by hiring lock-ups or burying any evidence.

Police believe the plan was to launch suicide attacks on targets including the Trafford and Arndale shopping centres and St Ann's Square in the city.

Sources said officers had identified a number of "key addresses" among the properties raided in Manchester and Liverpool since Wednesday.

They suspect that Abid Naseer, 22, was the ring leader. He was living at Galsworthy Avenue, in Cheetham Hill, Manchester and two other men living at the same address have also been arrested.

At properties in Cedar Grove, Toxteth, and Earle Rd, Wavertree, a total of four men have been arrested in Liverpool, along with a fifth who was detained at John Moores University.

Two security guards arrested in Clitheroe, Lancashire, had apparently moved into a bed and breakfast hotel there from flats in Highgate Street, in Edge Hill, Liverpool.

Around a dozen black-clad armed officers raided the Highgate St flat above an off licence on Wednesday.

Two men arrested at the Cyber Net Café in Cheetham Hill Road, Manchester, are thought to be of lesser interest.

Searches are continuing at three other properties in Cheetham Hill but nothing "significant" has yet been found, sources said.

Officers have also examined two cars as part of the investigation.

The suspects at Cedar Grove in Toxteth were often seen "obsessively" adjusting their yellow Nissan Micra, neighbours said, and the vehicle was later towed away for forensic exmaination.

A silver Rover MG ZR car parked outside a house in Abercarn Close, Manchester, which contained a newspaper clipping of a man in military uniform, was cordoned off by police.

MI5 is working "around the clock" to identify material from a surveillance operation that may be of use to the investigating team.

In total, 12 people have been arrested, aged between their mid-teens and 41, of whom 11 are Pakistani nationals.

Yesterday reports emerged of arrests in Pakistan in connection with the investigation.

It is thought that a group was sent from the al-Qaeda heartlands in the tribal areas of Pakistan to attack Britain, travelling under student visas.

Sources have said the group was connected with Rashid Rauf from Birmingham, a senior member of al-Qaeda, said to have been killed in a US missile attack last year.

Sunday Times : Minister hits out at attacks by US drones

Sunday, April 12, 2009

Minister hits out at attacks by US drones

David Leppard and Abul Taher | From The Sunday Times | April 12, 2009

A GOVERNMENT minister has called for Britain to distance itself publicly from the American policy of launching attacks on Al-Qaeda terrorists with pilotless drones to avoid inflaming Pakistani opinion.

Sadiq Khan, the community cohesion minister, said he had listened to the “anger and frustration” of students in Islamabad over US attacks inside Pakistan. “It’s quite clear in many Pakistani eyes that the UK is considered in the same terms as the US,” said Khan. “We want to explain that our foreign policy, especially on the issue of drone attacks, is distinct from US foreign policy.”

Khan’s comments came as the full extent emerged of what investigators believe is Pakistan-based control of the alleged Al-Qaeda plot to bomb shopping centres in Manchester over Easter.

Rashid Rauf, a fugitive British terrorist identified by MI5 as Al-Qaeda’s “director of operations” in Europe, is suspected of planning the bombing as part of a “master plan” for attacks on European cities.

Multiple cells, comprising at least 12 terrorists each, were dispatched last year from Pakistan’s tribal areas to conduct a series of atrocities in the UK, France, Belgium and elsewhere, an Al-Qaeda informant has told MI5. The cells are said to have been acting under the orders of Rauf, 27, from Birmingham, who has previously been linked to the failed suicide attack on London in July 21, 2005.

The plan was set in motion just weeks before a US Preda-tor missile strike targeted Rauf in a remote Pakistani village. Officials are still unclear whether he survived the attack last November.

Details of the plan were uncovered by MI5 last December after the arrest of 14 suspected Islamist terrorists in Brussels. Belgian prosecutors said at the time they believed the men were planning a suicide attack to coincide with a European Union summit attended by Gordon Brown.

A senior Scotland Yard official said one of the suspects had confessed that he had been “personally tasked” by Rauf to carry out the bombing. In an interview with MI5 he disclosed that Rauf, who fled to Pakistan seven years ago, had ordered a series of European attacks.

He said the Al-Qaeda chief had dispatched a cell leader to a British city to plan an attack there. Sources say the alleged Easter bomb plot is likely to have been that attack.

Last week 12 men, including 11 Pakistanis on student visas, were arrested in raids on Manchester, Liverpool and Clitheroe, Lancashire.

Telegraph : The new enemy within is invisible

Saturday, April 11, 2009

The new enemy within is invisible

Al-Qaeda is changing its tactics to avoid detection of its agents. Security forces must adapt quickly to find them, says Con Coughlin

By Con Coughlin | April 10, 2009

Within Britain's counter-terrorism community they are known as the "clean skins": highly trained, professional killers whose blameless backgrounds provide not the slightest clue as to their true, evil intent.

The phenomenon was first identified during the bloody 30-year campaign the IRA waged against the British Isles. At the start of the Troubles, British intelligence and security officials quickly established a profile of the main IRA suspects, enabling them to dent severely the organisation's operational effectiveness. To counter this, IRA commanders sought recruits who did not fit the classic image – no known involvement in Republican politics, no criminal record and preferably no Irish family ties.

Now it appears that the "clean skins" may be back, this time in Islamist form. That is the logical conclusion to be drawn from the latest operation in which anti-terror police detained 12 men in a series of raids conducted in Manchester, Liverpool and Clitheroe, Lancs.

Most of the headlines have inevitably focused on the resignation of Bob Quick, the country's leading anti-terrorism policeman, who risked jeopardising the entire operation by exposing its details in advance.

But it is the raids themselves, targeted at 11 Pakistani-born nationals who had entered Britain on student visas (and one British national), which suggest that al-Qaeda might now be attempting to effect a radical transformation in its tactics.

We should remember that September 11, 2001 changed the face of modern terrorism. Britain's security and intelligence establishment found itself on a sharp learning curve as it struggled to master the new threat that had suddenly appeared.

It was only through painstaking investigation of the subsequent plots in this country that a clearer picture emerged of the modus operandi of al-Qaeda's British-based terror cells. Up to now, nearly all of the major plots – both those that have succeeded and those that have been thwarted by the diligence of our security forces – have involved British passport holders of Pakistani descent, or "Brit-Paks" as they are known within the intelligence-gathering community.

The architects of the July 7 bombings in London in 2005 were Brit-Paks, as were many of those involved in the failed suicide bombings two weeks later. Those jailed for planning terror attacks in British shopping centres and airports fitted a similar profile.

As a consequence – and despite protests from leaders of the British Muslim community, who have insisted that Britain's two million Muslims pose no threat to national security – police and security officials have concentrated their efforts on infiltrating and monitoring known radical elements, particularly mosques, where inflammatory preachers such as Abu Qatada delivered sermons in favour of waging jihad against the West.

Much effort was expended on tracking the movements of the estimated 400,000 Brit-Paks who travel regularly between Britain and Pakistan, while MI6 worked closely with Pakistan's intelligence service, ISI, to spot potential terror leads.

Then, at the end of last year, the Government revealed that, at any given time, British security forces were contending with at least 20 active terror plots, mainly involving groups of Brit-Paks who have been radicalised and trained at Saudi-funded madrassas in Pakistan, and have then managed to return undetected to Britain. Despite their success in establishing a useful profile of likely jihadists, security officials are trained to keep an open mind as to possible changes in the pattern. "Terror groups have an advantage over us because they have no restrictions they have to work to," says a senior security official. "They will do whatever they can to ensure their attacks are a success."

For this reason, security officials need to be aware of what they refer to as "the diversification of the threat", where terror groups adapt their tactics to escape detection. Thus, even though radicalised Brit-Paks form the basis of the Government's normal terrorist profile, officials are well aware of discrepancies where white British males and Muslim converts of other ethnicities have cropped up.

The Government's recent report on counter-terrorism, Contest Two, suggested that al-Qaeda-related groups were trying to adapt their tactics to counter the British security forces' increased awareness of traditional operations. Commanders of British forces fighting in Afghanistan have uncovered evidence that British Muslims have been sending electronic components for use in the Taliban's roadside bombs; there have even been reports of them being involved in attacks on British patrols. Contest Two also warned that British hotels and public buildings faced the threat of Mumbai-style attacks by terrorists with automatic weapons.

Government officials have estimated the current threat against the UK to be at "the severe end of severe". This is one step short of critical, which is when the Government judges a major attack to be imminent, as it did with one alleged plot in the summer of 2006.

Senior police and security officers suspect those arrested this week were planning a number of suicide bombings in a major city centre over the Easter weekend. If true, this would confirm that a cell of Pakistan-born nationals has infiltrated the UK, a development that would add a disturbing dimension to the Government's counter-terrorism effort.

Every year, an average of 10,000 Pakistani nationals travel to Britain on student visas. Every applicant undergoes close scrutiny, including fingerprint checks against a range of immigration, terrorism and crime watch lists. If al-Qaeda has managed to avoid detection and infiltrate a "clean skin" cell into the UK, this system is clearly ineffective.

"It is a very different proposition if we have Pakistani citizens plotting terror attacks against Britain, as opposed to British citizens," says a senior intelligence official. "We will be entering a whole new ball game."

To start with, it will mean working even more closely with Pakistani intelligence, which has a chequered history of co-operating with its British counterpart.

Rashid Rauf, the British-born Islamist who is thought to be the mastermind of the latest alleged plot, managed to escape from Pakistani custody while his guards stopped for lunch at McDonald's, prompting speculation that he may have been an ISI agent all along.

And if British security officials are to prevent further terror attacks they will need full access to detainees held in foreign jails who might have important information, irrespective of the conditions in which they are being held.

Following the allegations made last month by former Guantánamo detainee Binyam Mohammed that he had been tortured with the complicity of MI5 officers, the Government is under pressure to limit British security officials' access to suspects held in countries like Pakistan, where torture is routine.

But to do so might seriously jeopardise attempts to combat the terror threat. No one in the intelligence and security services wants to torture suspects: but they do want access to the intelligence that will prevent further bloodshed on the streets of Britain.

Telegraph : Pakistan: origin of three-quarters of all terror plots

Saturday, April 11, 2009

Pakistan: origin of three-quarters of all terror plots

At least three in every four terror plots currently under investigation in the UK have their roots in Pakistan, according to the security services.

By Dean Nelson, South Asia Editor | April 10, 2009

Whilst Afghanistan was seen as the training ground of terrorists in the immediate aftermath of the September 2001 attacks, recent experience has shown that increasing numbers of al-Qaeda extremists are being trained across the border in the tribal areas in the north west of Pakistan.

President Obama openly refers to his “Af-Pak” strategy for combating militancy, such is the prevalance of terror suspects who have been radicalised in Pakistan.

Of the four men who carried out the London suicide bombings in July 2005, three were young British men of Pakistani origin who had travelled to the country to receive religious and military training.

Mohammed Siddique Khan, the leader of the plot, was raised in Beeston, West Yorkshire, but was understood to have made regular trips to terrorist training camps in southern Punjab, and was captured on video at Karachi airport in November 2004 with his accomplice Shehzad Tanweer, 22, another British national of Pakistan origin. They returned to Britain the following February.

The third bomber of Pakistani origin, Hasib Hussain, aged 18, had travelled to Pakistan 12 months before the attack.

Meanwhile, the alleged plot to bomb shopping centres in Manchester has been linked by MI5 to two al-Qaeda suspects in Pakistan - British Pakistani Rashid Rauf, who has been implicated in at least one other alleged terror plot, and Baitullah Mahsud, the leader of Pakistan’s Taliban movement who has promised attacks on the West in hate-filled pronouncements in recent weeks.

So many UK terror suspects have links to Pakistan that thousands of innocent travellers between the two countries every year are now closely monitored for signs of suspicious activity.

Latest estimates suggest 4,000 young British Muslims have been trained in terrorist camps in Pakistan, and with 400,000 British citizens visiting Pakistan each year, there are fears that many more will become radicalised.

Monitoring of regular visitors has intensified, which has raised the possibility of a change in tactics by terrorists, who may have switched to using Pakistani nationals who may not be so closely monitored when they visit the UK.

Shahid Aslam, a British employment solicitor who runs an immigration consultancy in Lahore, said terrorists could easily take advantages of gaps in the British visa application process to enter Britain on a valid visa.

He claimed there had been a number of cases where employees of agencies processing visa applications in Pakistan had accepted inducements to speed and guarantee entry visas.

Telegraph : Al-Qaeda terror plot to bomb Easter shoppers

Saturday, April 11, 2009

Al-Qaeda terror plot to bomb Easter shoppers

An al-Qaeda cell was days away from carrying out an "Easter spectacular" of co-ordinated suicide bomb attacks on shopping centres in Manchester, police believe.

By Duncan Gardham, Security Correspondent | April 10, 2009

Sources told The Daily Telegraph that the arrests of 12 men in the north west of England on Wednesday were linked to a suspected plan to launch a devastating attack this weekend.

Some of the suspects were watched by MI5 agents as they filmed themselves outside the Trafford Centre on the edge of Manchester, the Arndale Centre in the city centre, and the nearby St Ann's Square.

Police were forced to round up the alleged plotters after they were overheard discussing dates, understood to include the Easter bank holiday, one of the busiest shopping weekends of the year.

"It could have been the next few days and they were talking about 10 days at the outside," one source said. "We had to act." Police are now engaged in a search for an alleged bomb factory, where explosives might have been assembled.

If such a plot was carried out, it would almost certainly have been Britain's worst terrorist attack, with the potential to cause more deaths than the suicide attacks of July 7, 2005, when 52 people were murdered.

A plan to arrest the suspects in a series of co-ordinated raids yesterday morning had to be hastily brought forward to Wednesday afternoon after the country's most senior anti-terrorism officer, Assistant Commissioner Bob Quick, of the Metropolitan Police, was photographed going into Downing Street carrying a briefing paper with top secret details of Operation Pathway in full view.

Yesterday morning, Mr Quick resigned after he was told by the Jacqui Smith, the Home Secretary, that he had lost her confidence and that of MI5.

As a result of his blunder, hundreds of police officers had to be scrambled to arrest the suspects, who were being monitored round the clock.

Former police chiefs pointed out that rounding up suspected suicide bombers in public places in Liverpool, Manchester and Clitheroe, Lancs, had put other people at risk and could also have compromised the operation.

Gordon Brown, the Prime Minister, described the alleged plot as "very big" and said investigators were looking at links with Pakistan.

Mr Brown said: "We know that there are links between terrorists in Britain and terrorists in Pakistan. That is an important issue for us to follow through and that's why I will be talking to President Zardari about what Pakistan can do to help us in the future."

All but one of the men arrested were Pakistani nationals who came to Britain on student visas. This suggested a possible new tactic by al-Qaeda, which had previously used British-based extremists who travelled to Pakistan for training.

The issue of student visas represents a potential security nightmare for the police and MI5. There are 330,000 foreign students in Britain and around 10,000 such visas are issued every year to Pakistanis alone.

Phil Woolas, the Immigration Minister, has described the student visa system as "the major loophole in Britain's border controls".

Several of the suspects who were being questioned last night, were from the al-Qaeda heartlands in Pakistan's border area with Afghanistan.

Peter Fahy, chief constable of Greater Manchester, said police had been forced to act to protect the public. Asked about al-Qaeda involvement, he added: "We know what is the nature of the threat to this country and where it comes from."

But he sought to reassure shoppers, and added: "I would like to say I would have no hesitation, or any of my family, in using any of those locations that have been mentioned."

The security services suspect that several of the men arrested were trained at religious schools in Pakistan and sent to launch suicide attacks on the West.

They were suspected to have chosen Easter as the most significant Christian holiday for an attack.

Police believe the suspects may have smuggled bomb-making equipment into the country and were ready to launch their attacks.

Yesterday, searches focused on a property in Highgate Street, Liverpool, although nothing "significant" had yet been found.

Sources said police had arrested the man they suspected was the ring-leader, Abid Naseer, 22, at an address in Galsworthy Avenue in Cheetham Hill, Manchester.

He is said to be from the tribal areas of Pakistan where the Taliban and al-Qaeda have established their base.

The alleged members of the cell had signed up for a range of student courses, while two were employed as security guards at a new Homebase store in Clitheroe, Lancs.

Among the locations raided on Wednesday afternoon was the Cyber Net Café in Cheetham Hill, where it is thought the men communicated using emails.

Security sources suspect they received their instructions from al-Qaeda commanders in Pakistan.

The leader of the Pakistan Taliban is Baitullah Mehsud, who last week claimed responsibility for an attack on a police compound in Lahore and promised to attack the West. At least one of the arrested men is from Mehsud's heartland of South Waziristan, sources in Pakistan said.

WSJ : U.K. Official Resigns After Security Lapse

Friday, April 10, 2009

U.K. Official Resigns After Security Lapse

By CARRICK MOLLENKAMP, ALISTAIR MACDONALD and SIOBHAN GORMAN | April 10, 2009

LONDON -- The Metropolitan Police Service entered a new phase of turmoil when its top counterterrorism official, Bob Quick, resigned in the wake of his inadvertent disclosure of secret plans to stop an alleged terrorist plot in northwest England.

John Yates, a 28-year Metropolitan Police veteran known for his skill in murder cases and delicate political inquiries, immediately succeeded Mr. Quick, becoming the third counterterrorism chief Scotland Yard has had since late 2007. The change comes as the U.K. is dealing with the reality that small, radical Islamic cells remain a big threat -- even as the government spends more time and money on intelligence and outreach to Muslim communities.

When Robert Quick arrived at No 10 Downing Street in London earlier this week, he was carrying a document labeled "Secret" visible in his hand.

Police now plan to question the 12 people arrested in raids across northwest England on Wednesday. Among them were 10 Pakistani-born U.K. students who may have entered the U.K. as a working group, according to people familiar with the situation. One suspect is U.K.-born.

Peter Fahy, chief constable of the Greater Manchester Police, said Thursday that the arrests had been planned for a day later. But officers scrambled to change plans when Mr. Quick -- visiting Downing Street Wednesday morning for a briefing with Prime Minister Gordon Brown -- was photographed carrying a briefing paper with a page of details of the raid clearly visible.

In the aftermath of the arrests, Mr. Quick apologized immediately. But pressure quickly mounted for his resignation, which he delivered Thursday morning.

Police haven't said whether the suspects were known to have a plan to attack specific targets.

Mr. Quick's gaffe drew attention away from the fact that the potential for terrorism remains an important issue in the U.K. A 2005 attack on the London transportation system left 56 people dead, and several failed attempts followed in 2006 and 2007. Last month, the Home Office said that al Qaeda may fragment, but that the terrorist threat will likely diversify toward smaller "self-starting" groups.

"We do have some very serious contamination" in the U.K. community, said Tarique Ghaffur, a London security consultant who served as a high-ranking Scotland Yard assistant commissioner until last November. "It's a very difficult scenario and a very dangerous one."

At the same time, there has been instability in the country's top counterterrorism ranks. In the past 18 months, counterterrorism chiefs Peter Clarke and Andy Hayman departed. Mr. Quick was named to the post a little more than a year ago.

A spokesman for London Mayor Boris Johnson wasn't immediately available for comment. A Scotland Yard spokesman said the turnover in such a critical post wouldn't have a negative impact on police performance.

Ties to Pakistan in the alleged terrorist plot are likely to be an important focus for the police, who have traced connections to that country in prior terrorist probes traced connections. Large-scale immigration to the U.K. from Pakistan, a former British colony, dates to the 1950s.

More than 250,000 people from Pakistan were allowed into the U.K. in 2007 for reasons including business, visits and emigration from Pakistan. In 2007, 10,600 people from Pakistan were granted student visas. A Home Office spokesman said the visa applications require fingerprinting and scrutiny of ties to terrorism.

A suspected terrorist named Rashid Rauf was thought to be a leader of a failed plot to blow up trans-Atlantic flights in 2006. Mr. Rauf, a U.K. citizen of Pakistani origin, was believed killed in a drone attack in Pakistan there last November. Since last summer, the U.S. has stepped up Central Intelligence Agency drone attacks against al Qaeda targets in Pakistan's tribal region along the Afghan border. Western security officials said the missile attacks appear to have reduced but not eliminated British terrorist plots linked to Pakistan.

A Pakistani security official said his government was aware of Wednesday's arrests and awaiting confirmation that those arrested were of Pakistani origin. The official said Pakistan was prepared to cooperate but wanted proof. Mr. Brown, the U.K. prime minister, was expected to speak soon with Pakistani President Asif Ali Zardari.

In a separate headache for Scotland Yard, police on Thursday suspended an officer following the death of a man during protests surrounding last week's Group of 20 meeting of world leaders. The suspension followed the disclosure of video footage that showed a police officer knocking down the man -- who wasn't protesting -- minutes before he collapsed and died from an apparent heart attack.

—Jennifer Martinez contributed to this article.

Write to Carrick Mollenkamp at carrick.mollenkamp@wsj.com, Alistair MacDonald at alistair.macdonald@wsj.com and Siobhan Gorman at siobhan.gorman@wsj.com

The News : 60 drone hits kill 14 al-Qaeda men, 687 civilians

Friday, April 10, 2009

60 drone hits kill 14 al-Qaeda men, 687 civilians

By Amir Mir | April 10, 2009

LAHORE: Of the 60 cross-border predator strikes carried out by the Afghanistan-based American drones in Pakistan between January 14, 2006 and April 8, 2009, only 10 were able to hit their actual targets, killing 14 wanted al-Qaeda leaders, besides perishing 687 innocent Pakistani civilians. The success percentage of the US predator strikes thus comes to not more than six per cent.

Figures compiled by the Pakistani authorities show that a total of 701 people, including 14 al-Qaeda leaders, have been killed since January 2006 in 60 American predator attacks targeting the tribal areas of Pakistan. Two strikes carried out in 2006 had killed 98 civilians while three attacks conducted in 2007 had slain 66 Pakistanis, yet none of the wanted al-Qaeda or Taliban leaders could be hit by the Americans right on target. However, of the 50 drone attacks carried out between January 29, 2008 and April 8, 2009, 10 hit their targets and killed 14 wanted al-Qaeda operatives. Most of these attacks were carried out on the basis of intelligence believed to have been provided by the Pakistani and Afghan tribesmen who had been spying for the US-led allied forces stationed in Afghanistan.

The remaining 50 drone attacks went wrong due to faulty intelligence information, killing hundreds of innocent civilians, including women and children. The number of the Pakistani civilians killed in those 50 attacks stood at 537, in which 385 people lost their lives in 2008 and 152 people were slain in the first 99 days of 2009 (between January 1 and April 8).

Of the 50 drone attacks, targeting the Pakistani tribal areas since January 2008, 36 were carried out in 2008 and 14 were conducted in the first 99 days of 2009. Of the 14 attacks targeting Pakistan in 2009, three were carried out in January, killing 30 people, two in February killing 55 people, five in March killing 36 people and four were conducted in the first nine days of April, killing 31 people.

Of the 14 strikes carried out in the first 99 days of April 2009, only one proved successful, killing two most wanted senior al-Qaeda leaders - Osama al Kini and Sheikh Ahmed Salim Swedan. Both had lost their lives in a New Year’s Day drone strike carried out in the South Waziristan region on January 1, 2009.

Kini was believed to be the chief operational commander of al-Qaeda in Pakistan and had replaced Abu Faraj Al Libi after his arrest from Bannu in 2004. Both men were behind the 1998 bombings of the US embassies in Dares Salaam, Tanzania, and Nairobi, Kenya, which killed 224 civilians and wounded more than 5,000 others.

There were 36 recorded cross-border US predator strikes inside Pakistan during 2008, of which 29 took place after August 31, 2008, killing 385 people. However, only nine of the 36 strikes hit their actual targets, killing 12 wanted al-Qaeda leaders.

The first successful predator strike had killed Abu Laith al Libi, a senior military commander of al-Qaeda who was targeted in North Waziristan on January 29, 2008.

The second successful attack in Bajaur had killed Abu Sulayman Jazairi, al-Qaeda’s external operations chief, on March 14, 2008.

The third attack in South Waziristan on July 28, 2008, had killed Abu Khabab al Masri, al-Qaeda’s weapons of mass destruction chief.

The fourth successful attack in South Waziristan on August 13, 2008, had killed al-Qaeda leader Abdur Rehman.

The fifth predator strike carried out in North Waziristan near Miranshah on Sept 8, 2008 had killed three al-Qaeda leaders, Abu Haris, Abu Hamza, and Zain Ul Abu Qasim.

The sixth successful predator hit in the South Waziristan region on October 2008 had killed Khalid Habib, a key leader of al-Qaeda’s paramilitary Shadow Army.

The seventh such attack conducted in North Waziristan on October 31, 2008 had killed Abu Jihad al Masri, a top leader of the Egyptian Islamic group.

The eighth successful predator strike had killed al-Qaeda leader Abdullah Azzam al Saudi in east of North Waziristan on November 19, 2008.

The ninth and the last successful drone attack of 2008, carried out in the Ali Khel region just outside Miramshah in North Waziristan on November 22, 2008, had killed al-Qaeda leader Abu Zubair al Masri and his Pakistani fugitive accomplice Rashid Rauf.

According to the figures compiled by the Pakistani authorities, a total of 537 people have been killed in 50 incidents of cross-border US predator strikes since January 1, 2008 to April 8, 2009, averaging 34 killings per month and 11 killings per attack. The average per month killings in predator strikes during 12 months of 2008 stood at 32 while the average per attack killings in the 36 drone strikes for the same year stood at 11.

Similarly, 152 people have been killed in 14 incidents of cross-border predator attacks in the tribal areas in the first 99 days of 2009, averaging 38 killings per month and 11 killings per attack.

Since September 3, 2008, it appears that the Americans have upped their attacks in Pakistani tribal areas in a bid to disrupt the al-Qaeda and the Taliban network, which they allege is being used to launch cross border ambushes against the Nato forces in Afghanistan.

The American forces stationed in Afghanistan carried out nine aerial strikes between September 3 and September 25, 2008, killing 57 people and injuring 38 others. The attacks were launched on September 3, 4, 5, 8, 12, 15, 17, 22 and September 27. However, the September 3, 2008 American action was unique in the sense that two CH-47 Chinook transport helicopters landed in the village of Zawlolai in the South Waziristan Agency with ground troops from the US Special Operation Forces, fired at three houses and killed 17, including five women and four sleeping children.

Besides the two helicopters carrying the US Special Forces Commandos, two jet fighters and two gun-ship helicopters provided the air cover for the half-an-hour American operation, more than a kilometre inside the Pakistani border.

The last predator strike on [April 8, 2009] was carried out hardly a few hours after the Pakistani authorities had rejected an American proposal for joint operations in the tribal areas against terrorism and militancy, as differences of opinion between the two countries over various aspects of the war on terror came out into the open for the first time.

The proposal came from two top US visiting officials, presidential envoy for the South Asia Richard Holbrooke and Chairman of Joint Chiefs of Staff Admiral Mike Mullen. However, the Pakistani military and political leadership reportedly rejected the proposal and adopted a tough posture against a barrage of increasing US predator strikes and criticism emanating from Washington, targeting the Pakistan Army and the Inter Services Intelligence (ISI) and creating doubts about their sincerity in the war on terror and the fight against al-Qaeda and Taliban.

NYT : In Baghdad, Obama Presses Iraqi Leader to Unite Factions

Tuesday, April 07, 2009

In Baghdad, Obama Presses Iraqi Leader to Unite Factions

By STEVEN LEE MYERS and HELENE COOPER | April 7, 2009

CAMP VICTORY, Iraq — President Obama made an unannounced trip to Iraq on Tuesday, his first visit as commander in chief to the site of one of the two wars he inherited and must now see through to an end.

President Obama spoke to American troops at Camp Victory, Iraq, on Tuesday. The president said that it was time for Iraqis “to take responsibility for their country and for their sovereignty.”

He returned to Washington early Wednesday, The Associated Press reported, landing at Andrews Air Force Base in Maryland and then proceeding by helicopter to the White House.

In Baghdad, reiterating his pledge to end a war he opposed from the start, he told a cheering crowd of American troops that it was time for Iraqis “to take responsibility for their country and for their sovereignty.” Later, with a hint of impatience in his words, he urged Iraq’s leaders to unite the country’s deeply divided ethnic and sectarian factions and to incorporate them all into government and security forces.

“It is time for us to transition to the Iraqis,” Mr. Obama told hundreds of American troops jammed into Al Faw Palace, an imposing sandstone building in an artificial lake that once belonged to Saddam Hussein. The uniformed crowd greeted that remark specifically with rousing applause.

Since becoming president less than three months ago, Mr. Obama has moved swiftly to reshape the war in Iraq. He announced plans to withdraw all combat forces by August 2010, as he sought to shift the military’s focus to the troubled war in Afghanistan.

He chose to visit Iraq first, though. The White House press secretary, Robert Gibbs, said he did so because of Iraq’s proximity to Turkey, where he began his day; the need to urge the Iraqis to do more to seek political reconciliation; and a desire to support “our men and women who are in harm’s way, either in Iraq or Afghanistan.”

Mr. Obama’s visit punctuated a trip that took him from an economic summit meeting in London to a NATO gathering and finally to Turkey, where during a discussion with students on Tuesday he faced a probing question of whether his policies were not in substance more like those of his predecessor, George W. Bush, than he liked to acknowledge.

“I have a responsibility to make sure that as we bring troops out, that we do so in a careful enough way that we don’t see a complete collapse into violence,” he replied, discussing Iraq among other issues. He added: “Moving the ship of state is a slow process. States are like big tankers. They’re not like speedboats.”

Mr. Obama arrived here aboard Air Force One at 4:42 p.m. after a flight carried out in secrecy and with heightened security, which included the closing of the main road to Baghdad International Airport. His visit was not a total surprise, because it had been widely discussed here since he arrived in Turkey on Sunday.

A pall of dust hung over Baghdad, grounding the helicopters that were to take the president and his entourage into the city itself, where a news conference with Prime Minister Nuri Kamal al-Maliki had been scheduled.

Mr. Obama instead met Mr. Maliki and several other senior officials in another palace near the airport before leaving Iraq, less than five hours after he arrived.

One of the Iraqis in the meeting, Saif Abdul Rahman, a senior adviser to Vice President Tariq al-Hashimi, said in a telephone interview that Mr. Obama focused on building institutions in Iraq, including the army and security forces, that were free of the sectarian tensions that still haunt this country.

He said that Mr. Obama pledged to abide by American commitments to Iraq, including the timetable for withdrawing all troops by the end of 2011. Mr. Rahman said he welcomed the president’s attention to a conflict and a country that seemed to demand less as of late than Afghanistan and Pakistan.

“That he chose to come to Iraq — that the first visit in the Middle East of a sitting American president is Iraq — is an important message,” he said.

Mr. Obama arrived only hours after a car bomb exploded in Kadhimiya, a predominately Shiite neighborhood in Baghdad that includes one of Shiite Islam’s holiest shrines. At least eight people were killed and nearly two dozen were wounded. That attack was carried out a day after a series of six car bombings killed at least 33 people and wounded scores in and around Baghdad, one of the bloodiest days in Iraq this year.

Mr. Obama, appearing briefly with Mr. Maliki on Tuesday night, referred to what he called “this senseless violence,” expressing condolences to the victims’ families and adding, “I remain convinced that our shared resolve and commitment to progress is greater than the obstacles that stand in our way.”

Their appearance, held at Camp Victory, was a contrast to Mr. Bush’s last visit here in December, which was marred when an Iraqi journalist hurled his shoes at him during an appearance beside Mr. Maliki. By coincidence, an Iraqi appeals court on Tuesday reduced the sentence that the journalist, Muntader al-Zaidi, received last month to one year in prison, instead of three, his lawyer and a spokesman for Iraq’s Supreme Judicial Council said.

Mr. Obama’s plan to begin withdrawing the roughly 140,000 American troops in Iraq on a strict timetable that would leave 35,000 to 50,000 by August 2010 has faced wariness from commanders, who fear that the security improvements remain fragile and could still be reversed. The troops who greeted him, however, appeared to support him enthusiastically. So many filled the vast, chandeliered rotunda where he spoke that people were being turned away.

Mr. Obama praised the troops for their accomplishments in a war he did not, as a candidate and a senator, support. “You have given Iraq the opportunity to stand on its own as a democratic country,” he said. “That is an extraordinary achievement, and for that you have the thanks of the American people.”

His remarks with Mr. Maliki had a more cautionary tone. He emphasized the need for Iraq to do more to advance political reconciliation, to improve governance and basic services, and to create security.

“Overall violence continues to be down,” Mr. Obama said. “There has been movement on important political questions. But we have been reminded that there’s more work to do.”

Mr. Maliki responded that “dialogue should be the only way to resolve any issue, whether it was between the Iraqi security components, or in the region.”

Earlier Tuesday, in Istanbul, Mr. Obama called for Israelis and Palestinians to make the compromises necessary to reach a Middle East peace accord. During his meeting with students, Mr. Obama said he still believed that peace was possible but added pointedly, “What we need is political will and courage on the part of the leadership.”

His comments came a day after he publicly repudiated statements from Israel’s hawkish new foreign minister, Avigdor Lieberman, that agreements reached at an American-sponsored peace conference in Annapolis, Md., in 2007 had “no validity.” Speaking before the Turkish Parliament on Monday, Mr. Obama said that Palestinian statehood was “a goal that the parties agreed to in the ‘road map’ and at Annapolis. That is a goal that I will actively pursue as president.”

Steven Lee Myers reported from Camp Victory, and Helene Cooper from Istanbul. Alissa J. Rubin and Rod Nordland contributed reporting from Baghdad.