Hooded killers massacre entire families, behead Buddhist monks and terrorize villages almost every night in Thailand's three provinces bordering Malaysia.

The attackers burn down schools, cut off the electrical power, shoot up villages, sabotage train tracks, attack military camps and stage drive-by shootings as part of a two-year-old local Islamic insurgency that threatens to destabilize all Southeast Asia.

Since January, 2004, the provinces of Pattani, Yala and Narathiwat have come to resemble war zones, complete with sandbagged bridges, military road blocks and an all-pervasive fear and uncertainty.

Nearly 30,000 combat troops have failed to quell the insurgency that has killed 1,100 people in 23 months.

Instead, southern Thailand, home to most of Thailand's three-million-strong Muslim minority has become a killing ground. It is the bloodiest spot on Earth for Muslims outside Iraq.

Now there is a growing concern the region may become a new front in a gruelling war of terror waged by al-Qaeda and other transnational Islamic terrorists.

Just as conflicts involving Muslims in Indonesia and the Philippines made these communities recruiting and training grounds for al-Qaeda and its Asian affiliate, Jemaah Islamiyah, the insurgency in southern Thailand could provide fertile soil for Islamic jihadists.

The region has already played a significant role in drawing Asia into the global war on terror.

Terrorists who plotted the 2002 Bali bombings held their crucial meetings in southern Thailand, and al-Qaeda leaders have regularly travelled through the area, recruiting terrorists and consulting co-conspirators.

Hambali, al-Qaeda's Southeast Asian mastermind and the man who ordered the Bali bombings and plotted other terrorist attacks in Indonesia, the Philippines, Singapore and Australia, was captured in Thailand in August, 2003.

"Southern Thailand's infamously porous maritime borders, which lie contiguous to the Islamic Malaysian and Indonesian archipelagos as well as strategic maritime trading routes across the Gulf of Thailand and Andaman Sea, makes it a logical staging point for external jihadists seeking alternative operational hubs in Southeast Asia," analyst Andrew Holt wrote recently in a report for the Asia Institute.

"The most dangerous battle in Southeast Asia is being waged in southern Thailand," predicts Rohan Gunaratna, an al-Qaeda expert with Singapore's Institute of Defence & Strategic Studies.

A capitalist country with a notorious hedonistic lifestyle, Thailand is closely allied to the United States and Australia. It looks like a natural target for Islamic jihadists seeking to expand their terrorism campaigns.

Islamic insurgencies have flared off and on in southern Thailand for centuries.

The border provinces were ruled by the independent Muslim sultanate of Pattani, but that ended when the Thai monarchy conquered Pattani in 1786 and formally annexed the region in 1902.

Thailand's Muslims, who have rebelled repeatedly, say they are being marginalized. They complain of poverty, joblessness and a lack of development compared with the rest of the country.

Poor educational opportunities have further fanned the region's discontent as young people travel to Malaysia to go to school or study in Egypt, Iraq, Sudan, Syria and other Middle Eastern countries, where they are exposed to radical Islamist teachings.

Arab donors have also helped fund new mosques and schools in southern Thailand, promoting more puritanical forms of Islamic teaching.

The border provinces had been relatively dormant since their last failed uprising in the 1980s. But that ended abruptly in January, 2004, when militant Islamists began burning schools, attacking government offices and raiding military camps for weapons.

The government's response seems to have further fuelled the insurgency. Thaksin Shinawatra, the Prime Minister, a tough-talking graduate of Thailand's police academy who made a fortune in the communications industry, ordered troops to crush the rebellion.

The U.S. State Department's annual human rights report on Thailand criticizes the government for excessive use of force and says police and military act with impunity.

In April, 2004, when widespread riots broke out in the border provinces, young men attacked Thai security forces with machetes and were repelled with automatic weapons fire. More than 107 people were killed, including 32 youths shot at point-blank range after they sought refugee in a mosque.

Again in October, 2004, 78 Muslim demonstrators died of suffocation while in police custody. This was after nearly 1,300 of them were piled on top of one another as many as six deep in trucks and driven to distant police stations.

Mr. Thaksin dismissed the deaths, saying the men probably died because they had been weakened by the Muslim fast of Ramadan.

As the insurgency has progressed, Thailand has adopted progressively harsher measures to try to contain it.

In July, the border provinces were placed under a state of emergency, and the Prime Minister and the military were given sweeping powers of arrest, search and seizure, and censorship.

Still, the conflict continues.

In a typical incident on Nov. 16, a squad of unidentified insurgents massacred a police informant, his wife and their seven children in a night raid on Bo Ngo, a village near the Thai-Malaysian border.

As the festering insurgency becomes more deadly, it has increased tensions between Thailand and Malaysia, with Thai officials accusing Malaysia of not doing enough to curb terrorist activities within its borders.

Even more sinister, however, is the suspicion that pockets of radicalized Islamic sentiment may ultimately give al-Qaeda a firm foothold in Southeast Asia.

© National Post 2005