The conviction in London this week of the Muslim fanatic known as "Osama bin London" and five of his followers is a significant blow to Islamist terrorism in the United Kingdom. In one of the biggest anti-terror trials in British history, Mohammed Hamid was found guilty of leading an al-Qaeda inspired terror cell and of running terrorist training camps on British soil with a view to sending recruits on to Afghanistan and East Africa.

He is, as a family member described him, "evil personified," and had a role in training the July 21, 2005 group of London bombers, who fortunately failed in their attempt to emulate the carnage inflicted by the 7/7 bombers two weeks earlier. Hamid's lead accomplice Atilla Ahmet admitted to three charges of soliciting murder, and was a key figure at the notorious Finsbury Park Mosque run by the firebrand Muslim cleric Abu Hamza al-Masri, who is awaiting extradition to face trial in the United States on terrorism charges.

Hamid's conviction however is just one jigsaw piece of a large-scale war British authorities are waging against Islamist terrorists on the streets of Britain's cities. It is a conflict that will have major ramifications for the wider war against terror across Europe, as well as in the United States.

The scale of the terror threat to the UK is enormous. According to Britain's domestic intelligence service, MI5, there are over 2,000 identified al-Qaeda inspired terrorist suspects in the UK, with up to 200 terror networks in operation. In addition, there are an estimated 2,000 unidentified terrorists operating in Britain, giving a total of up to 4,000 al-Qaeda linked operatives based in the United Kingdom.

Without doubt progress is being made by the security services in the fight against Islamist terror. British authorities are currently investigating no less than 30 active terror plots, and have foiled at least 15 major attempted terror attacks since 9/11. Over the past five years British police have made over 1,200 terrorism-related arrests, with more than 400 individuals charged.

But the war Britain is fighting is being undermined by a culture of political correctness and the damaging legacy of multiculturalism, as well as the erosion of British national sovereignty within Europe, a decline in British military capability and defence spending, and a reduced willingness to project power abroad. The appalling comments earlier this month by the Archbishop of Canterbury, Rowan Williams, supporting the adoption of aspects of Sharia law into British law, was a potent symbol of the Left's continuing shameful appeasement of Islamist extremism in British society.

The Royal United Services Institute (RUSI), Britain's most respected think tank on security and defense issues, recently issued a scathing indictment of Britain's overall ability to combat Islamist terrorism. The report by Gwyn Prins and the Marquess of Salisbury, entitled "Risk Threat and Security: The Case of the United Kingdom," is a must read for anyone concerned about the current state of America's closest ally.

The courageous RUSI paper notes "a loss in the United Kingdom of confidence in our own identity, values, constitution and institutions" and paints a disturbing picture of "a fragmenting, post-Christian society, increasingly divided about interpretations of its history, about its national aims, its values and its political identity." The report points out that a lack of integration among immigrant communities and a "mis-placed deference to multiculturalism" has completely undercut the fight against extremism, and "the country's lack of self-confidence is in stark contrast to the implacability of its Islamist terrorist enemy, within and without."

The report's powerful conclusion should serve as a wake-up call to Britain's political establishment, which has for the past two decades been sleep-walking to disaster in the face of the Islamist militant threat:

"The deep guarantee of real strength is our knowledge of who we are. Our loss of cultural self-confidence weakens our ability to develop new means to provide for our security in the face of new risks. Our uncertainty incubates the embryonic threats these risks represent. We look like a soft touch. We are indeed a soft touch, from within and without."

The Royal United Services Institute is right to point out that Britain's survival depends upon a renewed faith in her own identity, traditions, beliefs and culture, together with a commitment to rebuilding her armed forces. Crippling defence cuts under the Labour government have seriously depleted British naval power, and have reduced the British Army to its smallest level in centuries.

Britain must be willing to invest at a minimum 3 percent of GDP on defense, and ideally 4 percent, to ensure that her military operations can be sustained across the globe. Without such a commitment, the UK can only expect to decline as a power, wield less influence diplomatically, and face an increasingly dangerous world from a position of weakness. It is vital that Britain maintain its commitments to both Iraq and Afghanistan, crucial theatres of operation in a long global war the West is waging against the forces of militant Islam. There can be no doubt that the withdrawal of British and American forces from the Middle East or south Asia would hand a huge propaganda victory to al-Qaeda.

On the domestic front, Britain must take steps to further strengthen existing anti-terror legislation, including greater powers for police to detain suspected terrorists without charge for periods longer than the currently allowed 28 days, and an accelerated process for deporting or extraditing "preachers of hate." Militant Islamist groups such Hizb-ut-Tahrir (Islamic Party of Liberation) should have no place in British society and be included on the government's list of proscribed organizations. Conservative Party leader David Cameron is right to call for the banning of this dangerous movement, already outlawed in Egypt and Pakistan, which supports the establishment of a Muslim caliphate or empire. The UK should also resist efforts by the European Union to restrict British anti-terror efforts, and withdraw from the European Convention on Human Rights (ECHR).

In many ways Britain today is the central front in the battle against Islamist militancy in Europe, and developments there will be closely watched by al-Qaeda's high command, keen to gain a foothold in the West. Al-Qaeda can be defeated in Britain, and the conviction of Mohammed Hamid and his murderous cohorts is an important strike against some of the group's key British-based supporters. This success though will have to be emulated against thousands of other Islamist terrorists based in the UK, who must be hunted down as part of a long conflict that may last for decades. It is a war that has to be waged and ultimately won by a self-confident nation that believes in the rightness of its cause and is willing to defend the Western traditions of liberty and freedom, whether on the streets of London, Kabul or Baghdad.

Nile Gardiner is the director of the Margaret Thatcher Center for Freedom.