DESPITE a drop in the number of attacks in recent years, and some progress in fighting its perpetrators, terrorism remains a serious threat to Americans at home and abroad.
This was underscored last Sunday when an Islamic fanatic rammed an explosives-packed van into a bus in the Israeli-occupied Gaza Strip and killed eight people, including a United States college student, Alisa Flatow.
She was the third US citizen killed this year in a terrorist attack. Two US consulate workers died last month in Karachi, Pakistan, when gunmen ambushed their vehicle.
''Terrorism is cyclical. It is down, but not out,'' says a State Department official.
Moreover, there is growing concern that the threat could become even more serious. With ethnic and religious radicalism escalating and lethal technology increasingly available, some experts worry that extremists bent on mass murder may begin using biological and chemical -- and possibly nuclear -- weaponry.
Those expressing concerns point to last month's Tokyo subway nerve-gas attack that killed 11 people and injured more than 5,500 others.
''We hope that this does not herald the dawn of a new era long feared by counterterrorist experts: the increasing use of weapons of mass destruction against urban populations,'' says Adm. William Studeman, acting director of the Central Intelligence Agency (CIA).
Testifying before a congressional hearing last week, Admiral Studeman added: ''Unfortunately, we believe we will witness more of these types of attacks.''
At first glance, the latest statistics give an optimistic spin to international efforts to stem the problem. The impression is bolstered by recent US counterterrorism successes, including the February arrest in Pakistan of Ramzi Ahmed Yousef, the alleged mastermind of the 1993 World Trade Center bombing. But a closer look reveals a gloomier synopsis.
The State Department's annual terrorism report, due out this month, lists 331 incidents in 1994 compared with 427 the previous year. Of those, 66 attacks were aimed at US citizens or installations. Four Americans were killed and five injured.
While the volume of attacks decreased, however, the number of victims soared. In 1993, 109 people were killed worldwide. Last year, the death toll was 314.
Experts and officials attribute the more than threefold rise to the use of more powerful weapons and a readiness to kill indiscriminately on a grander scale. ''There is a momentum in terrorism toward bigger and better methods of delivering destruction,'' says Prof. Jerrold Post, a political psychologist at George Washington University in Washington, D.C.
As for bringing suspects to justice, the US can point to the captures of Mr. Yusef and several others. But many have never been caught, including Mir Aimal Kansi, who is suspected of firing in 1993 on cars near the entrance to CIA headquarters, in Langley, Va. Two CIA employees died and three were wounded.
Officials and experts do note a fall in state-sponsored terrorism. They attribute this, among other factors, to progress toward Middle East peace and United Nations sanctions imposed on Libya for refusing to surrender two suspects in the 1988 bombing of a Pan Am flight over Scotland.
There has also been improved international counterterrorism cooperation. Officials say countries that shared intelligence during the 1990 Gulf war are continuing to do so.
But the drop in state-sponsored terrorism has been offset by the emergence of new groups with amorphous leaderships and loyalties to religious or political ideals that transcend national boundaries.
''They are less constrained by state sponsors or other benefactors than are traditional groups,'' Studeman says. ''They are all well-funded. Some have developed sophisticated international networks that allow them greater freedom of movement and opportunity to strike, including in the United States.''
The threat is not confined to foreign groups. On Feb. 28, two Minnesota men became the first defendants convicted of possessing a biological weapon under a 1989 federal law. They were found guilty of possessing ricin, a powerful poison made from castor beans. The pair allegedly belonged to a radical antitax group.
The Clinton administration has cited the continuing terrorism threat in pushing sweeping legislation aimed at bolstering the government's counterterrorism efforts. The measure would create new federal antiterrorism laws, speed the deportation of suspected terrorists by creating special courts, toughen controls on bomb-making materials, and expand the FBI's wire-tapping authority.
The bill, however, has ignited an outcry from some lawmakers, civil liberty groups, and Arab-Americans. They see it as unconstitutional. One of the most controversial provisions involves the use of classified materials in deportation proceedings.
The bill seeks to protect intelligence sources by allowing the government to submit only a summary of classified material being used to obtain a deportation. This, critics say, makes it difficult for suspects to rebut evidence -- and violates the constitutional right of due process.
''How can an adversarial system function without an opportunity to confront evidence? It would be Kafkaesque,'' says Gregory Nojeim of the American Civil Liberties Union.
Another provision is designed to prevent funds from being raised in the US for foreign terrorists. But Arab-American organizations say it would prevent them from raising money for legitimate causes, such as schools. They complain that they are victims of guilt by association.