Maybe something can be learnt from the French experience with Islamic terrorism. As you may remember, there were two big waves of bombings, in 1986 and 1995. In each case, you had bombs in metros, restaurants, large stores, with each time a few people killed and several dozen injured, about once or twice a week for two or three months, most of it in Paris.
The first time, the interior minister famously claimed that "we would terrorize the terrorists" (that was after bombing n°2 of 10 or so). This did not work...
What did work was painstaking police work, understanding the network, infliltrating them, doing quiet diplomacy to kill off support from other countries. In both cases, ALL the terrorists were arrested. In the second case, it was significantly faster and one of the terrorists was killed before he could do a new bombing. (Ironically, the only terrorist not in jail in France today is the financier of the network, held in the UK because UK courts judged that his rights would not be protected by the savage French... 9/11 was not sufficient to change that).
The lesson, in any case, is that police work DOES work (and remember, back then, international cooperation was even worse than now). no need to invade Algeria, to bomb Lybia or whatever else could have been "desirable".
And everybody knows it even today. All the bomb plots that have been foiled in the past two years were so because of good ol'fashioned police work, not thanks to military action (I'll caveat with the possible value of military intelligence in that context...) - and note that the European govenrments have fully cooperated with the US on the law enforcement side, even at the worst times of the Iraq spat... Some people have kept their eyes on the ball, even in the US.
The point is that with police work, we are within the usual norms of a democratic society and we do not need to compromise our values. We fight back and do not give up our soul to do so.
