In early 1996, CIA director John Deutch convinced Secretary of State Warren Christopher to pull U.S. diplomats out of Sudan out of fear for their safety. His anxiety was based on intelligence that implicated the Sudanese government. Although the embassy wasn't formally shut down, it was vacated, and relations with Khartoum became severely strained.

Soon afterward, the CIA figured out that its analysis was wrong. A key source had either embellished or wholly fabricated information, and in early 1996 the agency scrapped more than 100 of its reports on Sudan.

Did the State Department then send its diplomats back? No. The bad intelligence had taken on a life of its own. A sense of mistrust lingered. Moreover, the embassy had become a political and diplomatic football for policymakers and activists who wanted to isolate Khartoum until it halted its bloody civil war with the largely Christian south. To this day, the embassy is mostly unstaffed.

This episode is worth recounting now. Whether hunting terrorists in Afghanistan, judging the integrity of Palestinian leader Yasser Arafat, mediating a dispute between India and Pakistan, or contemplating the virtue of an attack on Iraq, the Bush administration has given great weight to the content of U.S. (and sometimes foreign) intelligence reports. As the United States wages war on terrorism and Congress re- organizes and bolsters U.S. intelligence agencies, the influence of intelligence on foreign and military policy will only grow.

But American policymakers have to be intelligent about using intelligence. The story of U.S. policy in Sudan shows how bad intelligence -- or good intelligence badly used -- can damage U.S. interests. In Sudan, it confused us about political Islam, hurt our ability to intervene in the 47-year-old Sudanese civil war, and in 1996 undermined our best chance ever to capture Osama bin Laden and strangle his organization, before he was expelled from Sudan and found his way to Afghanistan.

We write from experience. One of us, Carney, a retired career diplomat, was the last U.S. ambassador to Khartoum. The other, Ijaz, an American hedge-fund manager, played an informal role by carrying messages between Khartoum and Washington after the embassy was emptied.

Perhaps the most important intelligence failure in Sudan wasn't about protecting the safety of U.S. diplomats but about understanding the political environment throughout the Muslim world. This is one aspect of Sudan's cautionary tale: the danger of losing sight of politics while focusing on terror.

During the 1990s, some committed Muslims around the world tried to forge a political movement to bridge the gap between the modern world and medieval scripture. But instead of engaging this movement, the United States lumped Islamic political groups together and viewed them all as dangerous. It clung to relationships with authoritarian regimes that felt threatened by Islamic groups and thus let well-organized radicals dominate the Muslim world's reformist movement.

Khartoum was an important center of Islamic political activity. Sudan's National Islamic Front, led by the fiery, Sorbonne-educated Hassan Turabi, seized power in a 1989 coup. Turabi held annual conferences that attracted thousands of Muslim radicals to Khartoum to craft their vision for an Islamic utopia. Turabi described the conferences as venting sessions aimed at moderating extremist Islam's rhetoric. The U.S. government called them terrorist planning sessions and, rather than infiltrate and decipher their workings, demanded that Khartoum shut them down.

Turabi raised deep concerns among U.S. allies in Riyadh, Cairo, Asmara, Addis Ababa, Nairobi and Kampala. Washington relied on their reading of events in Sudan, rather than on its own eyes and ears.

There were real grounds for concern. Sudan's new leaders expanded long-standing ties to Middle Eastern terrorist groups. Bin Laden and his followers arrived in 1991. The "Blind Sheikh," Omar Abdel Rahman, an Egyptian later convicted of plotting to blow up New York landmarks, received his U.S. visa from Khartoum in 1993.

By late 1995, however, many Sudanese leaders began to wonder if their embrace of foreign Muslim radicals was self-defeating, both a threat to internal security and a barrier to the world at large. But when Sudan aided France in capturing the notorious terrorist known as "Carlos the Jackal," U.S. analysts dismissed it as a sop to Western concerns rather than a change in Sudan's terrorism policy.

Bad intelligence included faulty accusations, as well as weak political analysis. False reports of plots against Americans prompted U.S. Ambassador Donald Petterson to threaten "the destruction of your [the Sudanese] economy" and "military measures that would make you pay a high price," according to his talking points. His successor, co-author Carney, delivered similar warnings in late 1995. The focus on false accusations distracted from U.S. calls for addressing the legitimate grievances of Sudan's embattled Southerners.

Poor intelligence also damaged U.S. counterterrorism policy in August 1998 when, in retaliation for the bombing of U.S. embassies in Kenya and Tanzania, American cruise missiles destroyed a pharmaceutical factory in Khartoum that Washington alleged was producing chemical weapons precursors. The Clinton White House didn't even have basic facts, such as who owned the plant. Instead, the president relied on unverifiable assertions about the firm's links to bin Laden.

The intelligence failure had roots in second-hand sources provided by anti-Khartoum allies in the region, particularly in Eritrea, Ethiopia and Egypt. If U.S. embassy staff had been left on the ground, firsthand reporting might have identified the right targets or averted a strike that ultimately strengthened sympathies for Islamic radicals bent on attacking the United States. This danger has arisen again recently, as the United States takes aim at remote, and sometimes wrong, targets in Afghanistan, relying on intelligence from often questionable sources.

The Sudan story also shows that politics can override and policymakers ignore good intelligence. By 1996, Khartoum's enthusiasm for an ideological Islamic state had waned. Pragmatists were prevailing over ideologues. In February 1996, as The Washington Post has reported, Khartoum tried to cooperate on counter-terrorism. Sudan's minister of state for defense (now its U.N. ambassador), Maj. Gen. Elfatih Erwa, secretly visited the United States to propose a trade -- bin Laden's extradition to Saudi Arabia in return for an easing of political and economic sanctions. Riyadh refused.

Three months later, after offering to hand bin Laden over to U.S. authorities, Sudan expelled him, as Deputy National Security Adviser Samuel R. "Sandy" Berger had urged. In July, Sudan gave U.S. authorities permission to photograph two terror camps. Washington failed to follow up. In August, Turabi sent an "olive branch" letter to President Clinton through Ijaz. There was no reply.

In October, Gutbi Al-Mahdi, Sudan's newly appointed, Western-educated intelligence chief, showed sensitive intelligence on terrorists tracked through Khartoum to one of us, Ijaz, to pass on to the Clinton administration. By election day 1996, top Clinton aides, including Berger, knew what information was available from Khartoum and of its potential value to identify, monitor and ultimately dismantle terrorist cells around the world. Yet they did nothing about it.

A further change took place in Sudanese thinking in April 1997. The government dropped its demand that Washington lift sanctions in exchange for terrorism cooperation. Sudan's president, in a letter that Ijaz delivered to U.S. authorities, offered FBI and CIA counter-terrorism units unfettered and unconditional access to Khartoum's intelligence.

Sudan's policy shift sparked a debate at the State Department, where foreign service officers believed the United States should reengage Khartoum. By the end of summer 1997, they persuaded incoming Secretary of State Madeleine Albright to let at least some diplomatic staff return to Sudan to press for a resolution of the civil war and pursue offers to cooperate on terrorism. A formal announcement was made in late September.

Two individuals, however, disagreed. NSC terrorism specialist Richard Clarke and NSC Africa specialist Susan Rice, who was about to become assistant secretary of State for African affairs, persuaded Berger, then national security adviser, to overrule Albright. The new policy was reversed after two days.

Overturning a months-long interagency process undermined U.S. counterterrorism efforts. In a final attempt to find a way of cooperating with U.S. authorities, Sudan's intelligence chief repeated the unconditional offer to share terrorism data with the FBI in a February 1998 letter addressed directly to Middle East and North Africa special agent-in-charge David Williams.But the White House and Susan Rice objected. On June 24, 1998, Williams wrote to Mahdi, saying he was "not in a position to accept your kind offer." The U.S. Embassies in Kenya and Tanzania were bombed six weeks later.

The Clinton administration modified its stance just before the USS Cole attack by sending FBI counterterrorism experts to Khartoum to look around. But it was all too little too late.

We're still living with the consequences of the U.S. policy and intelligence failure in Sudan. Khartoum offered us the best chance to engage radical Islamists and stop bin Laden early. If the United States is to account for the failures that led to the attacks of Sept. 11, we need to better understand our failures in Sudan. Solid intelligence that informs sound policy can produce the judiciousness that helps differentiate America from those who seek to destroy it. Timothy Carney served as U.S. ambassador to Sudan from August 1995 to November 1997. Mansoor Ijaz, an American Muslim of Pakistani origin, negotiated Sudan's counterterrorism offer to the United States in April 1997. Carney's views do not represent the views of the U.S. government.