With world attention focused on Israel’s war with Hezbollah, leading Democrats have finally settled on a position on Iraq. Surprise, they’re for a retreat. They’re wrong, and they have picked a terrible time to wave the white flag to terrorists.

In a letter to President Bush, Senate Minority Leader Harry Reid, House Minority Leader Nancy Pelosi and 10 other Dem bigwigs demanded Bush start withdrawing our troops this year and “transition to a more limited mission,” whatever that means.

“In the interests of American national security, our troops and our taxpayers, the open-ended commitment in Iraq that you have embraced cannot and should not be sustained. … We need to take a new direction,” the letter said.

Right, new direction: Backward, march.

Pelosi told The Washington Post a reason for the letter was Bush’s plan to shift more U.S. troops to Baghdad. That’s bizarre. Since that’s where most of the mayhem is taking place, putting extra troops there makes sense as the last hope of saving Iraq’s government.

But Pelosi and Reid work in strange ways. After months of seeing which way the political winds are blowing for the midterm elections, they’re obviously trying to take advantage of the war’s unpopularity. As such, they have set up a clear difference between the parties.

But they’re doing it while our troops are still fighting and dying there. And they’re undermining Israel as it battles Hezbollah in Lebanon and Hamas in Gaza. They have, in Margaret Thatcher’s famous phrase, gone wobbly. While there’s never a good time for weak knees, now is about the worst.

Thankfully, Bush doesn’t seem tempted to follow them. Despite enormous pressure from other countries, and some in the White House, he continues to speak forcefully for the most important principle of our time: The need to defeat terrorism. And he has correctly linked America’s fight in Iraq with Israel’s two-front campaign.

Even after what he called the “awful” events of Sunday, when Israeli bombs killed nearly 60 civilians, most of them children,” Bush held out for a “sustainable” ceasefire between Israel and Hezbollah. Most of the world, except a shrinking Tony Blair, is clamoring for an “immediate” cease-fire, a pause that would allow Hezbollah to rearm and reclaim southern Lebanon. Indeed, grisly images of dead children are the most powerful weapon Hezbollah has, which is one reason it hides in residential areas.

It is distressing, if not surprising, that France leads the way in surrendering to them. On Monday, their foreign minister was in Beirut, where he dined at the Iranian Embassy and called Hezbollah’s sponsor Iran a “great country” that “plays a stabilizing role in the region.”

Presumably, Democrats won’t go that far, but do those who believe America should quit Iraq also believe Israel should accept Hezbollah on its border? In either case, the message would be clear: terrorism pays. And we’re afraid of it.

That’s not to say dissent is unpatriotic or that differences on the war are not legitimate. Iraq has proven to be a huge mistake and many Israelis are saying their government blundered by being drawn into Lebanon on Hezbollah’s terms and timing.

Yet those mistakes, and the horror of civilian deaths, are not the fundamental issue. The overarching truth is that Islamic terrorists have started a world war – World War III – against America and our allies. Our errors may help the fanatics with their recruiting, but our policies are not the root cause of terrorism.

Bush knows that. Democrats have just proven they don’t.