The thrust of this Newsweek piece is that the Taliban is now using the controversy over the proposed Islamic Center near Ground Zero to draw new recruits, but I think this paragraph deserves emphasis:
Zabihullah also claims that the issue is such a propaganda windfall—so tailor-made to show how “anti-Islamic” America is—that it now heads the list of talking points in Taliban meetings with fighters, villagers, and potential recruits. “We talk about how America tortures with waterboarding, about the cruel confinement of Muslims in wire cages in Guantánamo, about the killing of innocent women and children in air attacks—and now America gives us another gift with its street protests to prevent a mosque from being built in New York,” Zabihullah says. “Showing reality always makes the best propaganda.”
On some level you can't really worry about what terrorists are going to say, because no matter what the U.S. does they're going to find some way to twist it into extremist propaganda. But the U.S. doesn't need to convince terrorists; it needs to convince the people that reside within what Marc Lynch describes as "the vast middle ground, the Arab and Muslim mainstream which both the Bush and Obama administrations have recognized as crucial both for defeating al-Qaeda and for achieving broad American national interests."
To that end, it's important that the United States not be seen as compromising its own values and laws when it comes to Muslims. Terrorists are going to hate America no matter what, but that large middle ground is going to be swayed by America's commitment to its own values, whether that means allowing American Muslims to build mosques, treating suspected terror detainees humanely, granting Muslims accused of terrorism due process, and minimizing civilian casualties to the largest extent possible. The kinetic aspects of the fight against terrorism aren't going to hinge on whether or not the Park51 project gets built, but the larger war of ideas is one where the U.S. can't afford to lose any more ground than it already has.
As far as the Taliban goes, though, the most important thing that could be done to stem recruitment would be to pay Afghan police and soldiers more than they would get fighting for the other side.
