Guest blogger Ray Close (who knows a thing or two about the MidEast, having been former CIA Station Chief for Saudi Arabia) over at Juan Cole nails it:

Strangely, George W. Bush does not seem willing yet to acknowledge this obvious defeat for his policies. One cannot attribute this merely to bad advice from his mentors, unless one is to believe that the neocons have a complete monopoly on all in-put to his mental processes. That is not a credible explanation. It seems more likely that his stubborn adherence to simplistic explanations of all anti-American sentiments and actions is another sign of his worrisome inability to comprehend the subtleties of this and other similar international challenges falling within the broad title of "the war on terror". Perhaps his intellectual mind-set ("there is no common ground between freedom and terrorism") simply makes it impossible for him to see the world as anything other than a zero-sum conflict between good and evil. That is very troubling quality, especially in the leader of a superpower.