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While concern increases about home-grown terrorism in the United States, a State Department report released Friday said international terrorist attacks dropped to their lowest annual total in 23 years in 1994.

But the report said there was an upsurge of attacks by Islamic extremist groups last year, and a senior official warned that locally spawned terrorism - comparable to the incident last week in Oklahoma City - is increasing worldwide.The official also described as a "dangerous problem" the links between domestic and foreign extremist groups. In that category, he said, are political as well as religious groups.

According to the State Department report, the 321 incidents of international terrorism recorded last year were less than half the 665 registered in 1987, the peak year. Globally, the number of attacks directed against U.S. targets fell to 66 last year from 88 in 1993. None took place on U.S. soil.

International terrorism is defined in the report as terrorism involving citizens or the territory of more than one country.

Philip Wilcox, the State Department coordinator for counterterrorism, said the decline in such activities was partly due to improved law enforcement cooperation around the world.

"There's less ambivalence in the world today that terrorism is a crime," Wilcox said. Another contributing factor, he said, was the demise of the Soviet Union, which he described as a refuge and a supporter of terrorist groups. Other positive developments he cited were the democratic evolution in South Africa and the beginnings of peace in Northern Ireland.

Despite the encouraging trend, Wilcox said political violence in general and terrorist acts without international components are probably more serious now than they have been in years. He said the State Department does not keep formal track of such activities.

One example is the Oklahoma City bombing last week in which there apparently was no foreign involvement.

The Oklahoma City experience is mirrored internationally in that terrorists increasingly take aim at "mass civilian targets" or at "nonofficial civilian targets which are softer and less protected," Wilcox said.

The improvement in the overall numbers, Wilcox added, also masks a sharp increase in terrorist activities directed against the Middle East peace process.

"There is a very dangerous and vicious rear-guard action led by Hamas and the Palestinian Islamic Jihad to destroy the peace process," he said.

The report said more than 100 civilians died in Israel, the West Bank and Gaza last year. It blamed extremists opposed to the peace process.

In contrast to radical Islamic groups, there has been a decline in attacks by secular terrorist groups, the report said. It added that the Islamic groups represent "a small minority in the Islamic world."

Among positive developments, the report cited the isolation of the pro-terrorism regimes in Libya and Iraq and the international economic pressure on Iran, which the report described a "major state sponsor of terrorism."