The system was blinking red." That's how the 9/11 Commission Report described the intelligence community's state of concern shortly before the 2001 terrorist attacks on New York and Washington.

"Counterterrorism officials were receiving frequent but fragmentary reports about threats," the commission reported, adding, "Indeed, there appeared to be possible threats almost everywhere the United States had interests--including at home."

But not until planes plowed into the Twin Towers did everyone understand what the chatter meant.

In a recent speech at The National Defense University, President Obama declared that the transnational terrorism threat is well in hand. But, plenty of signs indicate that's not the case.

Consider Hezbollah. This multi-tentacle stooge of Iran is a Shi'a Islamist terrorist group. It is also a political party that operates a shadow government in Lebanon.

For more than a year, Hezbollah has been increasing the tempo of its attacks on Western and Israeli targets in Asia and Europe. The Bulgarian government, for example, has connected the group to a bus bombing that killed five Israeli tourists and their driver last year.

Most recently, Hezbollah deployed "foreign fighters" to assist the Assad regime in beating back the opposition in Syria. This offensive further complicated an already complex crisis. It broadened the sectarian nature of the war, pitting Shi'a (Hezbollah, Iran, and the Syrian militias supporting Assad) against Sunni (the rebels).

It has also pitted terrorists groups against one another. Hezbollah is battling Assad's opposition whether they are "freedom fighters" or al Qaeda. Jabhat al-Nusra, the al Qaeda affiliate in Syria, is now pretty much at war with Hezbollah.

That may not sound like a bad thing, but it means the war will surely spread to Lebanon. Hezbollah has to expect payback. Car bombs will explode in Beirut, as Jabhat al-Nusra pays back Hezbollah. And, as terrorists kill terrorists, the people of Lebanon will be caught in the crossfire.

The Lebanese recognize this--and they are none too happy about it. Already some have expressed resentment over Hezbollah dragging the country into Syria's civil war. The people are seeing the group for what it is, a tool of Tehran.

That awareness may bring pain. Hezbollah's impulse will likely be to turn up the violence even more--while directing as much blame and animosity as possible toward Israel. And that could spark another military confrontation.

While Hezbollah sets the red lights blinking, the West mostly just blinks. The European Union remains bitterly divided over designating the terrorist organization as... a terrorist organization.

France, Britain and Germany are going halfsies--pressing the EU to label Hezbollah's armed-militia wing as a terrorist organization, while letting the political arm off the hook.

As long as the political arm is excluded, Europe won't be able to shut down terrorist fund-raising and recruiting in its own backyard.

The UN is not doing much to help either. Since 1978, the United Nations Interim Force in Lebanon (UNIFIL) has been charged with making sure the Lebanese-Israeli border region is free of any non-governmental armed personnel or weaponry. Clearly it has failed, in part because of self-imposed restrictions. For example, UNIFIL peacekeepers cannot even conduct regular building searches for arms!

Transnational terrorism is not in hand. The U.S. desperately needs to shore up its position in the Middle East. That means showing real leadership in dealing with Turkey, Israel, Iraq, Jordan and the six-nation Gulf Cooperation Council.

It means making clear that the "pivot to Asia" does not entail disengaging from the region. It means ramping up, not standing down, our global anti-terrorism initiative.

And it means developing a real strategy to prevent Islamist extremists from hijacking the Arab Spring.

Washington Examiner Columnist James Jay Carafano is Vice President for Defense and Foreign Policy Studies at The Heritage Foundation