London ? Far from being crippled by the U.S.-led war on terror, al-Qaida has more than 18,000 potential terrorists scattered around the world and the war in Iraq is swelling its ranks, a report said Tuesday.

Al-Qaida 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 think tank said.

Although about half of al-Qaida’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-Qaida 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 John Chipman told a press conference releasing “Strategic Survey 2003/4.”

At the same time it will likely 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 U.S.-led war on terror — the wars in Afghanistan and Iraq — may have boosted al-Qaida.

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

The U.S. occupation of Iraq brought al-Qaida recruits from across Islamic nations, the study said. Up to 1,000 foreign Islamic fighters have infiltrated Iraqi territory, where they are cooperating with Iraqi insurgents, the survey said.

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

The United States is al-Qaida’s prime target in a war it sees as a death struggle between civilizations, the report said. An al-Qaida leader has said 4 million Americans will have to be killed “as a prerequisite to any Islamic victory,” the survey said.

“Al-Qaida’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.