This weekend's arrest of 17 homegrown al Qaeda wannabes just across the border in Canada is a nightmarish reminder of the horrors that have been - and could be - right here at home again if we don't fully get our counterterrorism act together soon.

By many accounts, despite a ballooning budget and staff, the FBI is still struggling to get its arms around its newly reinvigorated counterror (CT) mission - a critical capability that could prevent another 9/11.

John Gannon, a former CIA and Homeland Security official, told the Senate in late April: "We still do not have a domestic-intelligence service that can collect effectively against the terrorist threat to the homeland or provide authoritative analysis of that threat."

Many experts say that the competent collection and analysis of domestic CT intelligence could have "connected the dots" and prevented 9/11. Yet this still remains the weakest link in our domestic fight in the War on Terror.

Experts contend that if President Bush hadn't taken the fight to the terrorists in places like Afghanistan and Iraq, we'd have a real terrorism problem here - one they believe the FBI couldn't handle.

And what about the post-9/11 anthrax letters? The FBI still hasn't closed those cases. What's more important: Digging up Jimmy Hoffa's corpse on some Michigan farm, or preventing another deadly anthrax attack? Priorities, puh-leez!

Another obvious sign of failure: The G-men still haven't developed an accurate terrorist watch list. FBI Director Robert Mueller told Congress it will be "some time" before that's done. That the bureau has had to scrap its $500 million Trilogy computer system hasn't helped, either.

So what's the problem?

First, there is the FBI's culture. The bureau has long considered itself a law-enforcement outfit. Getting an executive suite in the Hoover HQ building means cuffing and convicting crooks, not penetrating and analyzing shadowy Islamic terrorist networks.

Insiders are concerned that the long-standing FBI "cop" mentality of investigating a crime after it happens (i.e., reactive) isn't translating well into a CT state of mind, which must prevent a crime before it happens (i.e., predictive).

Personnel turnover has been a snag, too. Six - count 'em, six - senior CT managers have left the bureau since 9/11. Granted, it's a tough, thankless position, but the last one punched out after only eight months in the job. Something is amiss . . .

The flight of key personnel to the outside slows the bureau's much-needed CT transformation. Mueller says burnout and better pay are key factors in the "brain drain" to cushy security chief jobs at Fortune 500 companies.

In fairness, the G-men have made progress, too. The bureau established the National Security Branch from the separate counterterrorism, counterintelligence and intelligence divisions to improve info sharing.

And the FBI has added 2,000 new intelligence agents, doubling their ranks, dispersing them to Field Intelligence Groups in the FBI's 56 field offices - and established 120 Joint Terrorism Task Forces. Both upgrades helped the FBI contribute (along with the Homeland Security Department, the U.S. military, CIA and countless others) to preventing another homeland terrorist strike. No small achievement, by any measure.

And CT info is getting passed down to the local level, too, according to Mueller. According to first responders, information-sharing, while still far from perfect, is improving. Over 6,000 local/ state police have been given access to classified CT info.

On evidence, the FBI's is making only halting progress in balancing its "Book 'em, Dano" law-enforcement culture with its "Get Osama" counterterrorism mission. So what should be done?

First, Congress and Director of National Intelligence John Negroponte must exercise rigorous oversight, pressuring the FBI to fully embrace its CT mandate on par with battling crime. If the job isn't getting done, heads should roll.

Second, don't create another CT agency, like the British MI-5. Keep CT intel/law enforcement at FBI. The intel community is bloated enough already - and MI-5 wasn't able to prevent last year's London terror attacks, which killed more than 50 people.

Third, don't increase the Pentagon's or the CIA's domestic CT role. Beyond civil-liberty concerns, their CT assignments should be overseas, making sure foreign terrorists don't get to our shores. Let FBI (and DHS) do domestic CT.

The idea that the FBI can't do domestic CT is hogwash. It successfully caught spies, saboteurs and ran agents before and during World War II. The mere notion that it can't do the job now must have J. Edgar Hoover rolling over in his grave.

Peter Brookes, a senior fellow at The Heritage Foundation, is the author of "A Devil's Triangle: Terrorism, WMD and Rogue States."