Recent terrorist activities and tactics are recounted. Descriptions of various terrorist groups are provided, as are analyses of the involvement of various African, Communist, Middle Eastern, and Central and South American States in terrorism and/or drug trafficking. The use by terrorist groups of drug trafficking as a means of obtaining money to finance their operations is considered. Also examined is the increasing use of terrorist tactics by narcotic traffickers and the coalescence of various terrorist groups and traffickers. The Nation's intelligence-gathering capability with respect to terrorism and drug trafficking is reviewed, as are various investigative and preventive initiatives undertaken by the Drug Enforcement Administration, the Department of Defense, and the Central Intelligence Agency. International cooperation in combating terrorism and drug trafficking is discussed in the context of international law and agreements.