"Tough on crime. Tough on the causes of crime." Although I'm no fan of Blair, this saying should apply to the so-called "war on terror." Tough on terror. Tough on the causes of terror. Of course, advocating such a position could lead to being accused of being an "appeaser," or worse. However, the all stick, no carrot approach of current policy will never defeat "terror." Sure there are the Al-Qaeda and Taliban types who are beyond reach. But they would not have a fertile ground to grow if their raison d'etre were removed. They are not the real problem. The real problem is those millions of Arabs and Muslims around the world who either identify or sympathize with them.
So, what's missing in current policy? Outward expression of sympathy with the fate of Arabs and Muslims during the last century. Such an expression of understanding would go a long way in convincing the Arab/Muslim "street" that we "get it." A more neutral position of the Israeli-Palestinian conflict would also help. As would a shift in policy away from support of autocratic regimes such as Saudi Arabia and Egypt, as well as a public apology for support of such regimes in the past.
As of now, all the U.S. offers, besides force, is democracy at the point of a gun. Why would that have appeal to the Arab/Muslim "street." As long as the U.S. leadership and the U.S. media views the "war on terror" through the lens of force, it is a war that will not be won.