It was the scream that people noticed. Monique Danison, an American college student, had just finished lunch on American Airlines Flight 63 from Paris to Miami when she heard a woman cry out in terror. "When someone screams the way she did," says Danison, "you know something bad is happening."

Bad is right. Richard Reid, a British passenger on the Boeing 767, was trying to light a fuse protruding from his shoe, witnesses say. According to the FBI, packed in the sole were enough high explosives to blow a hole in the fuselage of the aircraft. But the attempted bombing was foiled. Two flight attendants struggled with the tall, unkempt man after one of them noticed the sulfurous smell of a lighted match. Danison remembers one of the attendants crying, "Oh, my God! Somebody help me!" and then calling for "water, contact solution, anything you have." Passengers passed cups and glasses back to the scene. One of the attendants poured a bottle of water over Reid, who was then restrained with passengers' belts and sedated with drugs from the onboard medical kit. For the rest of the tense flightthe captain had warned that Reid might have accomplices onboardpassengers and crew guarded their prisoner, one of them keeping a grip on his long ponytail. Escorted by Air Force fighters, Flight 63 was diverted to Boston, where Reid was taken into custody. He was denied bail on Dec. 28, and is awaiting trial in Plymouth, Mass.

Immediately after the incident, it was tempting to view Reid more as a lone nut than a cog in a terrorist machine. On Dec. 21, when he first tried to fly to Miami, he raised enough concernshe paid for his ticket in cash and had no checked bagsthat airport officials questioned him so long that he missed the flight. When he showed up the next day, his appearancelong-haired, disheveled, druggieseemed almost calculated to draw attention. At the boarding gate, says Annie Joly, a Frenchwoman on the flight, "I was immediately struck by how bizarre he looked." After Reid's arrest, the bare bones of his life as a small-time London crook came out, and he claimed to have made the bomb from a recipe on the Internet. He seemed to be what he looked like, the ultimate loser.

Few now think Reid was a bungling amateur. On Jan. 16, a U.S. federal grand jury indicted Reid on nine counts, including use of a weapon of mass destruction and attempted murder. He has pleaded not guilty. The indictment alleges that Reid received training at camps in Afghanistan run by al-Qaeda, the organization headed by Osama bin Laden. The bomb inside his shoe was a sophisticated one. In fact, it turns out to be a favorite of European al-Qaeda operatives. Both FBI and French law-enforcement sources tell TIME there were palm prints and hair on the shoe that didn't belong to Reid. Clearly he had had help.

Reid certainly seems to have had friends in strange places. In January the Wall Street Journal published an astonishing tale. Journal reporters in Kabul purchased a secondhand computer whose hard drive contained thousands of files written by al-Qaeda members. One file was a detailed account of the travels last summer of "Abdul Ra'uff," who flew from the Netherlands to Israel, Egypt and Turkey scouting locations for terrorist attacks. Abdul Ra'uff's itinerary matched one known to have been taken at the same time by Reid. FBI analysts now firmly believe that Reid and Ra'uff are the same man. Moreover, in the past two weeks, European investigators have linked Reid to some of the best-known terrorist cells on the continent.

The story of Richard Reid, however, is about more than one failed terrorist attempt. An investigation of Reid's case by Time has underlined a truth that experts on terrorism know very well, even if you rarely hear it mentioned by officials in the Bush Administration. As the fighting in Afghanistan winds down, the Administration seems ready to prosecute the war against terrorism and its state supporters elsewherein the Philippines, Somalia or even Iraq. But the heartland of Islamic extremist terrorism is now western Europe, where U.S. military power has less to offer by way of a solution. That's why understanding Richard Reid's world is so important.

Londonistan Calling

Reid was not born to Islam; he is a convert with a convert's zeal. His grandfather was a Jamaican immigrant to Britain, and his father Colvin Robin Reid met and married Lesley Hughes, a white woman who was the daughter of an accountant and magistrate. Richard was born in London in 1973, by which time his father, known as Robin, was in jail for car theft. All told, Robin has spent about 20 years behind bars. "I've seen the inside of most of London's prisons," he says. "I was no great example to my son."

Richard's parents divorced when he was 11. He left school at 16, as soon as he legally could. By then he had drifted into the south London world of street crime and car theft. At 17, after mugging a senior citizen, he was jailed for the first time. In the next few years, Richard was in and out of prison, and when he bumped into his father in a shopping mall seven or eight years ago, he seemed depressed and downhearted. "He was born here in Britain, like I was," says Robin. "It was distressing to be told things like 'Go home, nigger!'" For once Robin, who had converted to Islam while in prison in the 1980s, had a suggestion that seemed to make sense. Muslims, he says, "treat you like a human being." Plus, he says, they get better food in prison. Richard took his father's advice. The next time he was incarcerated, he converted.