Far from being crippled by the US-led war on terror, al-Qaeda has more than 18,000 potential terrorists scattered around the world and the war in Iraq is swelling its ranks, a report said today.

al-Qaeda is probably working on plans for major attacks on the United States and Europe, and it may be seeking weapons of mass destruction in its desire to inflict as many casualties as possible, the International Institute of Strategic Studies said in its annual survey of world affairs.

Osama bin Laden's network appears to be operating in more than 60 nations, often in concert with local allies, the study by the independent think tank said.

Although about half of al-Qaeda's top 30 leaders have been killed or captured, it has an effective leadership, with bin Laden apparently still playing a key role, it said.

"Al-Qaeda must be expected to keep trying to develop more promising plans for terrorist operations in North America and Europe, potentially involving weapons of mass destruction," IISS director Dr John Chipman told a news conference releasing "Strategic Survey 2003/4".

At the same time it was likely to continue attacking "soft targets encompassing Americans, Europeans and Israelis, and aiding the insurgency in Iraq," he added.

The report suggested that the two military centerpieces of the US-led war on terror - the wars in Afghanistan and Iraq - may have boosted al-Qaeda.

Driving the terror network out of Afghanistan in late 2001 appeared to have benefited the group, which dispersed to many countries, making it almost invisible and hard to combat, the report said.

And the Iraq conflict "has arguably focused the energies and resources of al-Qaeda and its followers while diluting those of the global counterterrorism coalition that appeared so formidable" after the Afghan intervention, the survey said.

The US occupation of Iraq brought al-Qaeda recruits from across Islamic nations, the study said. Up to 1,000 foreign Islamic fighters had infiltrated Iraqi territory, where they were cooperating with Iraqi insurgents, the survey said.

Efforts to defeat al-Qaeda would take time and might accelerate only if there were political developments that now seem elusive, such as the democratisation of Iraq and the resolution of conflict in Israel, it said.

It could take up to 500,000 US and allied troops to effectively police Iraq and restore political stability, IISS researcher Christopher Langton told the news conference.

Such a figure appeared impossible to meet, given political disquiet in the United States and Britain and the unwillingness of other nations to send troops, he said.

The United States is al-Qaeda's prime target in a war it sees as a death struggle between civilisations, the report said. An al-Qaeda leader has said four million Americans would have to be killed "as a prerequisite to any Islamic victory," the survey said.

"al-Qaeda's complaints have been transformed into religious absolutes and cannot be satisfied through political compromise," the study said.

The London-based institute is considered the most important security think tank outside the United States. Its findings on al-Qaeda's expanding structure and growing support by allied terrorist networks around the world track with similar assessments from governments and other experts.

The IISS said its estimate of 18,000 al-Qaeda fighters was based on intelligence estimates that the group trained at least 20,000 fighters in its camps in Afghanistan before the United States and its allies ousted the Taliban regime. In the ensuing war on terror, 2,000 al-Qaeda fighters have been killed or captured, the survey said.

al-Qaeda appears to have successfully reconstituted its operations by dispersing its forces into small groups and through working with local allies, such as the Great Eastern Islamic Raiders' Front in Turkey, the report said.

"al-Qaeda is the common ideological and logistical hub for disparate local affiliates, and bin Laden's charisma, presumed survival and elusiveness enhance the organisation's iconic drawing power," it said.