LONDON: We are locked in a historic struggle in Iraq. On its outcome hangs more than the fate of the Iraqi people. Were we to fail, which we will not, it is more than "the power of America" that would be defeated. The hope of freedom and religious tolerance in Iraq would be snuffed out.

Dictators would rejoice; fanatics and terrorists would be triumphant. Every nascent strand of moderate Arab opinion, knowing full well that the future should not belong to fundamentalist religion, would be set back in bitter disappointment.

If we succeed - if Iraq becomes a sovereign state, governed democratically by the Iraqi people; the wealth of that potentially rich country, their wealth; the oil, their oil; the police state replaced by the rule of law and respect for human rights - imagine the blow dealt to the poisonous propaganda of the extremists. Imagine the propulsion toward change it would inaugurate all over the Middle East.

In every country, including our own, the fanatics are preaching their gospel of hate, basing their doctrine on a wilful perversion of the true religion of Islam. At their fringe are groups of young men prepared to conduct terrorist attacks however and whenever they can. Thousands of victims the world over have now died, but the impact is worse than the death of innocent people.

The terrorists prey on ethnic or religious discord. They foment hatred, they deter reconciliation. In Europe, they conducted the massacre in Madrid. They threaten France. They forced the cancellation of the President of Germany's visit to Djibouti. They have been foiled in Britain, but only for now.

Of course they use Iraq. It is vital to them. As each attack brings about American attempts to restore order, so they then characterize it as American brutality. As each piece of chaos menaces the very path toward peace and democracy along which most Iraqis want to travel, they use it to try to make the coalition lose heart, and bring about the retreat that is the fanatics' victory.

They know it is a historic struggle. They know their victory would do far more than defeat America or Britain. It would defeat civilization and democracy everywhere. They know it, but do we? The truth is, faced with this struggle, on which our own fate hangs, a significant part of Western opinion is sitting back, if not half-hoping we fail, certainly replete with schadenfreude at the difficulty we find.

So what exactly is the nature of the battle inside Iraq itself? This is not a "civil war", though the purpose of the terrorism is undoubtedly to try to provoke one. The current upsurge in violence has not spread throughout Iraq. Much of Iraq is unaffected and most Iraqis reject it.

The insurgents are former Saddam sympathizers, angry that their status as "boss" has been removed, terrorist groups linked to Al Qaeda and, most recently, followers of the Shia leader, Muqtada Al Sadr.

The latter is not in any shape or form representative of majority Shia opinion. He is a fundamentalist, an extremist, an advocate of violence. He is wanted in connection with the murder of the moderate and much more senior leader, Ayatollah al Khoei last year.

The prosecutor, an Iraqi judge, who issued a warrant for his arrest, is the personification of how appallingly one- sided some of the Western reporting has become. Dismissed as an American stooge, he has braved assassination attempts and extraordinary intimidation in order to follow proper judicial process and has insisted on issuing the warrant despite direct threats to his life in doing so.

There you have it. On the one side, outside terrorists, an extremist who has created his own militia, and remnants of a brutal dictatorship which murdered hundreds of thousands of its own people and enslaved the rest. On the other side, people of immense courage and humanity who dare to believe that basic human rights and liberty are not alien to Arab and Middle Eastern culture, but are their salvation.

Over the past few weeks, I have met several people from the Iraqi government, the first genuine cross-community government Iraq had seen. People like Mrs Barwari, the Minister of Public Works, who has just survived a second assassination attempt that killed her bodyguard; people like Mr Zebari, the Foreign Minister.

They are intelligent, forward-looking, tolerant, dedicated to their country. They know that "the occupation" can be used to stir up anti-coalition feeling; they, too, want their country governed by its people and no one else.

But they also know that if we cut and run, their country would be at the mercy of warring groups which are united only in their distaste for democracy. The tragedy is that outside of the violence which dominated the coverage of Iraq, there are incredible possibilities of progress. There is a huge amount of reconstruction going on; the legacy of decades of neglect is slowly being repaired.

By June 1, electricity will be 6,000MW, 50 per cent more than prewar, but short of the 7,500MW they now need because of the massive opening up of the economy, set to grow by 60 per cent this year and 25 per cent the next.

The first private banks are being opened. A new currency is in circulation. Those in work have seen their salaries trebled or quadrupled and unemployment is falling. One million cars have been imported. Thirty per cent now have satellite TV, once banned, where they can watch al-Jazeera, the radical Arab TV station, telling them how awful the Americans are.

The internet is no longer forbidden. Shrines are no longer shut. Groups of women and lawyers meet to discuss how they can make sure the new constitution genuinely promotes equality. The universities eagerly visit Western counterparts to see how a modern, higher-education system, free to study as it pleases, would help the new Iraq.

People in the West ask: why don't they speak up, these standard-bearers of the new Iraq? Why don't the Shia leaders denounce al-Sadr more strongly? I understand why the question is asked. But the answer is simple: they are worried. They remember 1991, when the West left them to their fate.

They know their own street, unused to democratic debate, rife with every rumour, and know its volatility. They read the Western papers and hear its media. And they ask, as the terrorists do: have we the stomach to see it through?

I believe we do. And the rest of the world must hope that we do. None of this is to say we do not have to learn and listen. There is an agenda that could unite the majority of the world.

It would be about pursuing terrorism and rogue states on the one hand and actively remedying the causes around which they flourish on the other: the Palestinian issue; poverty and development; democracy in the Middle East; dialogue between main religions.

I have come firmly to believe the only ultimate security lies in our values. The more people are free, the more tolerant they are of others; the more prosperous, the less inclined they are to squander that prosperity on pointless feuding and war.

But our greatest threat, apart from the immediate one of terrorism, is our complacency. When some ascribe, as they do, the upsurge in Muslim extremism to Iraq, do they really forget who killed whom on September 11, 2001? When they call on us to bring the troops home, do they seriously think that this would slake the thirst of these extremists, to say nothing of what it would do to the Iraqis?

Or if we scorned our American allies and told them to go and fight on their own, that somehow we would be spared? If we withdraw from Iraq, they will tell us to withdraw from Afghanistan and, after that, to withdraw from the Middle East completely and, after that, who knows? But one thing is for sure: they have faith in our weakness just as they have faith in their own religious fanaticism. And the weaker we are, the more they will come after us.

It is not easy to persuade people of all this; to say that terrorism and unstable states with WMD are just two sides of the same coin; to tell people what they don't want to hear; that, in a world in which we in the West enjoy all the pleasures, profound and trivial, of modern existence, we are in grave danger. There is a battle we have to fight, a struggle we have to win and it is happening now in Iraq. -Dawn/The Observer News Service.