FIVE years into the War on Terror, Tony Blair called yesterday for a “complete renaissance of our strategy” to defeat militant Islam.

Speaking in Los Angeles, the Prime Minister admitted that the use of force alone had alienated Muslim opinion, and said that there was now an “arc of extremism” stretching across the Middle East and beyond. He called for an “alliance of moderation” that would combat terrorism using values as much as military might.

On a day when four British soldiers were killed by insurgents in Afghanistan and Iraq, the Prime Minister’s words were an apparent admission that the use of military force alone had failed.

His speech came amid growing Cabinet dissent and backbench unease that Britain was too readily following Washington’s lead over the Middle East. Jack Straw, the former Foreign Secretary, deliberately broke the Cabinet line last week by criticising Israel’s response as disproportionate.

The Times has learnt that the Foreign Office tried and failed to get Mr Blair to call for an immediate ceasefire in Lebanon when he saw Mr Bush last Friday. It had also failed to persuade No 10 to stop US aircraft delivering weapons to Israel from using British airports.

Aides to Mr Blair described his speech to the World Affairs Council as a challenge to the US, not a change of attitude. They said it was “nonsense” to suggest Mr Blair was having doubts about war in Iraq. But dissident Labour MPs were delighted. Fabian Hamilton, who sits on the Foreign Affairs Select Committee, said that he hoped the party and the Muslim community would welcome the speech, “even if they might say ‘ it’s about time, too’.”

He continued: “It was obvious from the start that you do not fight terror by condemning a whole section of the world community as extremists and exacerbating that by supporting the dreadful bombing on Lebanon. It sounds like he has seen the light.”

Mr Blair said that once peace had been restored in Lebanon “we must commit ourselves to a complete renaissance of our strategy to defeat those who threaten us”. To defeat extremism, the world needed an “alliance of moderation to paint a different future in which Muslim and Christian, Arab and Westerner, wealthy and developing nations can make progress in peace and harmony with each other.

“We will not win the battle against this global extremism unless we win it at the level of values as much as force, unless we show we are even-handed, fair and just in the applications of those values to the world. At present we are far away from persuading those we need to persuade that this is true.”

The West had to address issues such as poverty, climate change, trade, but above all to “bend every sinew of our will to making peace between Palestine and Israel”. Unless that happened “we will not win, and it is a battle we must win”.

In an implicit rebuke to Mr Bush, Mr Blair said that an opportunity had been missed when Israel pulled out of Gaza. “That could have been and should have been the opportunity to restart the peace process. Progress will not happen unless we change radically our degree of focus effort and engagement, especially with the Palestinian side. In this, active leadership of the US is essential but also of the participation of Europe, of Russia and of UN.

“We need . . . to put a viable Palestinian government on its feet, to offer a vision of how the roadmap to final-status negotiation can happen and then pursue it week in, week out until it’s done. Nothing else is more important to the success of our foreign policy.”

Mr Blair’s speech followed growing tensions over his tough approach to the Lebanon conflict. The Times understands that Margaret Beckett, the Foreign Secretary, who endorsed the unsuccessful move to try to persuade Mr Blair to push for an immediate ceasefire, had made it plain to the Prime Minister that a wide body of opinion in the Foreign Office and the Labour Party was strongly opposed to his tactics.

Plans for Mr Blair’s holiday, which was due to start this weekend, were under review because of the Lebanon conflict, officials said.

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