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Government efforts to prevent the radicalisation of British Muslims have been set back by Israel's assault on Gaza, the security and counter-terrorism minister, Lord West of Spithead, announced yesterday.

In an outspoken assessment of the terror risk facing Britain, Gordon Brown's security adviser was scathing about the assertion, made by Tony Blair when prime minister, that foreign policy did not alter the UK's risk of a terror attack.

"We never used to accept that our foreign policy ever had any effect on terrorism," he said. "Well, that was clearly bollocks."

He added: "They [the Blair administration] were very unwilling to have any debate about how our foreign policy impacted on radicalisation."

The former first sea lord, who also described terrorists as "bastards", said that the Israeli offensive had reinforced perceptions among people that there was a "linkage" between Israel and the west. Home Office informants in the Muslim community had reported that the conflict had played into the hands of al-Qaida recruiters, he said.

Addressing a seminar, intended to brief architects and engineers on the adaptation of new buildings to the terror threat, West said: "The business in Gaza has not helped us at all in our counter-radicalism strategy. We have key people in the Muslim community who we are in dialogue with, and they are quick to let us know there is an issue that is causing us a worry.

"They said it was coming over very badly. It fits in with the al-Qaida message, so we have to be very quick to respond to that and we have been quick to make sure that for Friday prayers, it is clear what our position is.

"There is no doubt that when you see these pictures coming back [from Gaza], that in the mind of people making hate, there is a linkage between the US, Israel and the UK. Without a doubt it will have set us back."

Violence in the Palestinian territory flared again yesterday with the deaths of an Israeli soldier and a Palestinian near the Gaza border.

Radical Muslim organisations have seized on the latest conflict to raise their profile in universities as well as among local communities. At the weekend, Hizb-ut-Tahir, a radical Islamist group which the British government has considered banning, marched in London with placards bearing pictures of injured women and children above the slogan: "Who will defend the children of Gaza?"

Earlier this month, the head of MI5, Jonathan Evans, said the Israeli action gave extremist groups in the UK more ideological ammunition. Community groups working with young Muslims have also said that the action has set back their efforts by years.

West, meanwhile, described the threat of international terrorism as a severe one. "Every day, over my desk, I see things, I have to say, that I find extremely worrying and make one's hair stand on end," he said.

He said he was gloomy about the growing likelihood of a chemical, biological or radioactive assault by a terror group, which he said was not a question of "if" but "when".

He added: "We have known for years that this is what they intend, but we are now a lot further down the track. They are always looking at radiological bombs or chemical attacks.

"Vehicle-borne improvised explosive devices are now, today, the greatest threat to us. If you put one near an old building the whole thing will collapse."

Explaining part of the government's counter terrorism strategy, dubbed Contest, which involved pursuing would-be terrorist cells, the peer said that security services were involved in "pursuing, tracking, watching the bastards as they try and kill us".