The foundation, made up of former military special operations forces members, found that terrorists are getting better at sustaining themselves through the drug trade and other illegal activities, giving them the economic base for terrorist activities.

The foundation usually puts out an annual count of world conflicts this time of year, but the prevalence of terrorist activities made the true tally of conflicts impossible to calculate, F Andy Messing Jr, executive director of the Alexandria, Virginia, think tank, said on Monday.

The proliferation of nuclear weapons and the ease with which terrorist groups can make weapons of mass destruction are big concerns, the panel said.

The expansion of US intelligence has helped considerably in pinpointing these groups, but the foundation was uncertain about whether intelligence groups have caught up to the rise of terrorism.

The United States must reconfigure its forces to meet the threat of terrorism, using greater special operations capabilities over conventional military resources, said Messing.

State-to-state conflicts would also continue, mostly disputes over water, timber, oil, religion, drugs and border issues, the panel said.