For a few harrowing weeks last fall, a group of U.S. officials believed that the worst nightmare of their lives--something even more horrific than 9/11--was about to come true. In October an intelligence alert went out to a small number of government agencies, including the Energy Department's top-secret Nuclear Emergency Search Team, based in Nevada. The report said that terrorists were thought to have obtained a 10-kiloton nuclear weapon from the Russian arsenal and planned to smuggle it into New York City. The source of the report was a mercurial agent code-named DRAGONFIRE, who intelligence officials believed was of "undetermined" reliability. But DRAGONFIRE's claim tracked with a report from a Russian general who believed his forces were missing a 10-kiloton device. Since the mid-'90s, proliferation experts have suspected that several portable nuclear devices might be missing from the Russian stockpile. That made the DRAGONFIRE report alarming. So did this: detonated in lower Manhattan, a 10-kiloton bomb would kill some 100,000 civilians and irradiate 700,000 more, flattening everything in a half-mile diameter. And so counterterrorist investigators went on their highest state of alert.
"It was brutal," a U.S. official told TIME. It was also highly classified and closely guarded. Under the aegis of the White House's Counterterrorism Security Group, part of the National Security Council, the suspected nuke was kept secret so as not to panic the people of New York. Senior FBI officials were not in the loop. Former mayor Rudolph Giuliani says he was never told about the threat. In the end, the investigators found nothing and concluded that DRAGONFIRE's information was false. But few of them slept better. They had made a chilling realization: if terrorists did manage to smuggle a nuclear weapon into the city, there was almost nothing anyone could do about it.
In the days after Sept. 11, doomsday scenarios like a nuclear attack on Manhattan suddenly seemed plausible. But during the six months that followed, as the U.S. struck back and the anthrax scare petered out and the fires at Ground Zero finally died down, the national nightmare about another calamitous terrorist strike went away.
The terrorists did not. Counterterrorism experts and government officials interviewed by TIME say that for all the relative calm since Sept. 11, America's luck will probably run out again, sooner or later. "It's going to be worse, and a lot of people are going to die," warns a U.S. counterterrorism official. "I don't think there's a damn thing we're going to be able to do about it." The government is so certain of another attack that it has assigned 100 civilian government officials to 24-hour rotations in underground bunkers, in a program that became known last week as the "shadow government," ready to take the reins if the next megaterror target turns out to be Washington. Pentagon strategists say that even with al-Qaeda's ranks scattered and its leaders in hiding, operatives around the world are primed and preparing to strike again. "If you're throwing enough darts at a board, eventually you're going to get something through," says a Pentagon strategist. "That's the way al-Qaeda looks at it."