Story Highlights • Annual report on global terrorism says nearly half of attacks were in Iraq

• Al Qaeda and other militants reportedly find haven on Pakistan's northwest border

• Iran is the "most dangerous enabler of terrorism in that region," official says

• "Progress is mixed," report says

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WASHINGTON (CNN) -- Iraq's sectarian warfare fueled a sharp increase in global terrorism in 2006, the U.S. State Department reported Monday.

The total number of terrorist attacks was up more than 25 percent from the previous year, according to the State Department's annual report on global terrorism.

Incidents in Iraq accounted for nearly half of the 14,000 attacks and about two-thirds of the more than 20,000 fatalities worldwide. The number of deaths blamed on attacks increased by about 40 percent.

The spike comes from the eruption of sectarian killings and bombings that followed the February 2006 bombing of the al-Askariya mosque in the Iraqi city of Samarra, according to Frank Urbancic, the State Department's acting counterterrorism coordinator.

That attack, blamed on al Qaeda in Iraq, destroyed a revered Shiite Muslim shrine and led to a wave of reprisals between Iraq's Sunni and Shiite communities.

The number of people killed in terrorist attacks in Iraq rose from 8,262 in 2005 to 13,340 last year, said Russell Travers, deputy director of the National Counterterrorism Center.

Militants find new safe haven

Terrorist organizations behind the violence are setting up along Pakistan's northwest frontier in safe havens created by the country's September 2006 peace agreement with tribal leaders, the report said.

Despite the presence of 80,000 Pakistani troops and border guards along Afghanistan's frontier with Pakistan, the tribal areas have become "sources of instability for Pakistan and its neighbors," Urbancic said.

Tribal leaders are not living up to their agreement to deny shelter to Islamic militants, he said. That has led to more fighters pouring into Afghanistan, where U.S. troops are battling a resurgent Taliban movement.

Meanwhile, al Qaeda and other groups, including Islamic guerrillas and Kurdish separatists fighting the Turkish government, are fighting to establish sanctuary in Iraq amid the chaos, Urbancic said.

The report accuses Iraq's neighbors Iran and Syria of fueling violence in Iraq by providing weapons and training to militant groups and allowing fighters to cross into Iraq to attack American troops.

The report also singles out their support for Lebanon's Hezbollah, the Shiite militia that fought a monthlong war with Israel in 2006. Urbancic called Iran "the most dangerous enabler of terrorism in that region."

The report found that in Africa, al Qaeda operatives remain in Somalia despite the Ethiopian invasion in December that pushed a coalition of Islamic militias out of the capital, Mogadishu. Islamic fighters continue to fight troops from Ethiopia and the Somali transitional government.

"Somalia remains a concern, as the country's unsecured borders and continued political instability provide opportunities for terrorist transit and/or organization," the report found.

Some successes noted

Despite the overall increase in international terrorism, there were some successes in the past year, the report indicated.

The plot to bomb trans-Atlantic airliners last year was foiled, and no major terrorist attacks occurred in Europe in 2006.

The total number of attacks declined in Indonesia, Pakistan and India, despite attacks on commuter trains in the Indian city of Mumbai that killed more than 200 people in July.

Reid calls for change of course

Senate Majority Leader Harry Reid, D-Nevada, said the new document, which comes as President Bush prepares to veto an emergency war-spending bill that calls for U.S. combat troops to leave Iraq in 2008, "dramatically demonstrates once again the unfortunate results of four years of a failed strategy."

"Congress is asking the president to change course in Iraq because it is what the American people, military experts and the Iraq Study Group know is necessary to more effectively fight terrorism," Reid said in a statement issued Monday afternoon. "We hope the president seizes this opportunity to change course instead of refusing to recognize the reality on the ground."

The report, however, declares that "progress is mixed," more than five years after al Qaeda's September 11, 2001, attacks on New York and Washington. It concludes that the nature of terrorism is shifting toward "global insurgency."

"If the battle against terrorism isn't in Iraq, it's going to be somewhere else," Urbancic said. "It started out in Afghanistan. The terrorists are looking for places where they can operate and that's what they're doing. So we can fight them in Iraq, we can fight them somewhere else. The fact is, they're there, and they're going to find other ungoverned spaces."

The 2006 report is the second year that the State Department has used a broader definition of terrorism -- "attacks against noncombatants for political reasons," as Travers put it.