The ouster of Yemeni President Mansour Hadi on Thursday is a victory for al-Qaeda as well as Iran, and a major setback for U.S. counterterrorism policy.

President Hadi was a key U.S. ally against al-Qaeda in the Arabian Peninsula (AQAP), the regional franchise of the al-Qaeda network that probably poses the greatest threat to the U.S. homeland.

AQAP has pioneered the use of sophisticated bombs that are difficult to detect, such as the one used by the so-called “underwear bomber” when he tried to explode a bomb in an airliner over Detroit on Christmas day 2009.

AQAP also claimed responsibility for the Jan. 7th terrorist attack against Charlie Hebdo that killed twelve people in Paris. AQAP could spur “lone wolf” attacks inside the U.S., as it has done repeatedly in the past.

Yemen is on the verge of becoming a “new Afghanistan” – a failed state that hosts terrorist organizations.

The civil war in Yemen creates a vacuum of power that AQAP will try to fill. Yemen is the backdoor to Saudi Arabia, the world’s leading oil-exporting state. Both AQAP and the Houthi rebels who toppled the Yemeni government pose threats to Saudi stability and possibly the continued flow of Saudi oil exports.

The Houthi victory also highlights the aggressive foreign policy of Iran, which has supplied financial support and arms to the Houthis as part of its intensifying proxy war with Saudi Arabia. Yet the Obama administration continues to turn a blind eye to Iranian support for regional subversion and terrorism while it pursues a nuclear deal with Tehran.

Even more worrisome, the fall of Yemen’s Hadi government is a major defeat for U.S. counterterrorism policy. The Obama administration has trumpeted the supposed success of its counterterrorism policies in Yemen, despite the fact that it has long been clear that its strategy was failing.

Incredibly, President Obama cited his counterterrorism approach in Yemen as a success and a model for future U.S. policy against ISIS in Iraq and Syria as recently as last September.

Perhaps it is time for the Obama Administration to wake up and rethink its strategy for fighting the war against al-Qaeda, which it clearly is losing.