For the first time since the Second World War, the civilian populations of western democracies are themselves the targets of hostile, foreign attacks. For nearly 60 years, the armies and air forces of America, Australia, Britain and some other European countries have been able to bomb and strafe people in faraway lands (most of them poor) with little thought for consequences at home. Latterly, even their military casual-ties have been light. Governments had to reckon with popular compassion, but not with popular fear. Now, wars have become more than television spectacles. The inhabitants of London, Paris, Rome, Madrid, New York, Washington and so on have some first-hand knowledge of the fears that have been all too real to people in Hanoi, Phnom Penh, Baghdad, Kabul and many other cities, and of the anxieties that plague those who live in, say, Tehran or Damascus.

To say this is not to take any satisfaction from the horrible bombings in Madrid. On the contrary, it is to recognise that what is loosely called al-Qaeda terrorism (al-Qaeda being a brand name rather than a discrete entity) is nastier than anything perpetrated by Basque separatists, Irish republicans or Red Brigades. The new terrorists make no pretence of aiming to disrupt or even to hit prestige targets. The Madrid bombers could easily have attacked outside rush hours and still caused incalculable damage to the city's transport network, causing some casualties (as does western bombing from the air) but claiming that these were incidental. They aimed for maximum death rates, however - and, since many victims were not commuting civil servants or bankers but African and Arab migrants travelling to menial city-centre jobs, they clearly do not care whom they kill. Only the deepest hatred can explain such actions and, while it is no doubt satisfying to resort to the political cliches of utter condemnation and resolve to stand firm (against what exactly?), we had better try to understand where the hatred comes from.

Two sources stand out. The first is the mirror image of western politicians' claims that "our way of life" is under threat, that the terrorists hate liberty and democracy. This may be true but, as many in the Muslim world see it, the west threatens their way of life and hates their most precious values. Many Europeans only slowly came to terms with curry smells, Arabic and veils in their cities; and supposedly liberal-minded folk still fret, in their respectable way, about the future of "Britishness". Muslims have every reason to feel their culture under far greater threat, as Microsoft, AOL Time Warner, Britney Spears and so on spread to every corner of the planet, while US money and armour almost invariably get their way. What is the US and British ambition to spread democracy and free markets across the Middle East, partly by force, but an attempt to defeat what some Muslims value as their "way of life"? This grievance inspires mainly a section of the Muslim elite - the likes of Osama Bin Laden, who thinks US troops on Saudi soil defile holy places. But it is easy to see how such ideas can whip up wider feeling among the Muslim masses, particularly when recent invasions have strengthened the view that the western powers are hostile aggressors.

Which brings us to the second source of hatred: poverty, misery and despair. From Casablanca to Jakarta, in ever-growing slums and refugee camps, these provide not only foot soldiers for terrorist missions, but also an environment where they can get tacit support and physical shelter. Wage war on poverty rather than on terror, we can argue, and the terrorists can indeed be hunted down with all the hammed-up determination that George W Bush and Tony Blair can muster. But, and here's the rub, the neoconservatives in Washington and their curious new Labour supporters in Britain truly believe that free markets (democracy, when push comes to shove, seems to be optional) offer the best route out of poverty.

Just as what was good for General Motors was once good for America, so now, according to the neo-cons, what is good for Halliburton (or similar corporations) is good for the world. In fact, free markets on the US model increase inequality rather than general prosperity. Because of its extravagant promises of earthly riches, capitalism leads to earthly disappointment, making young men all too susceptible to an ideology (call it Islamofascism, if you like) that promises other-worldly bliss through martyrdom.

Thus, the approach of the US and British governments, by strengthening both sources of hatred, seems doomed to intensify terrorism. Until now, most voters have thought only spasmodically about geopolitics. To be sure, bombing other countries was never popular in Europe, but it was not a big vote-loser. The Spanish overwhelmingly opposed the Iraq war, but seemed ready to forgive their government as long as it kept most of them economically comfortable. The Madrid bombings changed all that. Though the Aznar government's inept attempt to blame the Basques was partly responsible, the Spanish made a simple calculation: if their troops had kept out of Iraq, 201 people, now dead, would still be alive in Madrid. Facing accusations of cowardice, they may find this hard to admit. But treat sceptically any poll that gives other reasons for their switch of support.

The idea that geopolitical strategies should be polluted by a crude popular fear of attack, and that gangs of outlaws should influence democracies, may be abhorrent. But the grisly truth is that poor people in Iraq and Afghanistan have achieved a kind of equality with rich westerners. Both now know fear. Our lives may soon prove as cheap as theirs. That is the progress made so far in the war on terror.

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