When the Iranian mullahs chose Salman Rushdie as the target of their murderous fatwa, they knew what they were doing. The immediate occasion for the Ayatollah Khomenei’s call for Rushdie’s assassination, on Valentine’s Day 1989, was “The Satanic Verses,” with its irreverent fantasia on the Prophet Mohammed. But the deeper cause lay in the very nature of Mr. Rushdie’s imagination, the artistic and moral creed that has animated his writing ever since his 1981 masterpiece, “Midnight’s Children.” More than any writer of our time, Mr. Rushdie has been a foe of purity, of the belief that virtue demands restriction and purgation, severance and taboo. The Islamic ideologues who placed Mr. Rushdie in fear of his life for nine years, and who managed to wound or kill his Japanese, Norwegian, and Italian translators and publishers, recognized that this conviction made him their foe, as well.

Because he comes from an Indian Muslim family, Mr. Rushdie witnessed firsthand, in India and Pakistan, the particular virulence of the Islamicist rage for order, which in the last four years has claimed thousands of victims, in New York and Bali and London and Madrid. But it is not only Muslim fanaticism that Mr. Rushdie resists in his fiction. Politics, no less than religion, can make a fetish of purity; and if Mr. Rushdie often seems to expect this from Pakistan, whose very name means “Land of the Pure,” he feels all the more betrayed when it emerges in nominally democratic India. Any reader of Mr. Rushdie’s novels knows that some of his chief comic targets have been Hindu politicians. There is the Bombay demagogue Bal Thackeray, portrayed in “The Moor’s Last Sigh” as Raman Fielding, leader of the Mumbai Axis; there is Indira Gandhi, the “Widow” of “Midnight’s Children,” who plunges India into literal darkness with her declaration of emergency rule.

By the same token, the chief villain in “Shalimar the Clown” (Random House, 416 pages, $25.95), Mr. Rushdie’s new novel about ethnic religious violence in Kashmir, may be an Islamic terrorist, affiliated with Abu Sayyaf, Al Qaeda, and the Afghan mujahedeen, but some of his angriest writing is directed against the Indian Army, which has devastated the province in order to defend it. His work offers no fiercer portrait of the pure-minded than General Hammirdev Kachhwaha, the Indian officer responsible for counterterrorism operations in the fictional Kashmiri village of Pachigam. Kachhwaha is ostensibly in Kashmir to protect it against Pakistani-sponsored infiltration, but he finally comes to see the whole province – civilians and fighters, natives and foreigners – as one giant pollution, which he yearns to sweep clean:

It was not his way to take off his gloves but there was a time and a place for gloves and Kashmir was not a boxing ring and the Marquess of Queensbury’s rules did not apply. … If he were allowed to take his gloves off, if his boys were allowed to stop pussyfooting and namby-pambying and mollycoddling and pitter-pattering around, if they were allowed to crack down on the miscreants by whatever means necessary, then he could clean up this mess, no problem.

Justifications for cruelty, Mr. Rushdie knows, are not limited to one faith, or one nation. Kachhwaha would heartily agree, for example, with the reaction of Senator Inhofe of Oklahoma to the evidence of torture at Abu Ghraib prison: “You know, they’re not there for traffic violations … they’re murderers, they’re terrorists, they’re insurgents. Many of them probably have American blood on their hands. And here we’re so concerned about the treatment of those individuals.”

“Shalimar the Clown” is a return to form for Mr. Rushdie after the misstep of his last novel, the frequently embarrassing “Fury” (2001). “Fury” wanted to puncture the ballooning vanity of New York at the turn of the millennium; its plot and narrator were deeply indebted to Bellow’s “Mr. Sammler’s Planet,” that brilliant portrait of decayed Manhattan in the late 1960s. But Mr. Rushdie, who had only recently moved to the city, was mostly reduced to cataloging the trivia and celebrity gossip of the moment, in tirades that already require footnotes.

For better or worse, it is the India of his youth, not the America of his middle age, that nourishes Mr. Rushdie’s imagination. And while “Shalimar the Clown” takes detours into 1980s Los Angeles and 1930s Strasbourg, it succeeds best as a novel of Kashmir, the ruined garden of the subcontinent, where Mr. Rushdie’s own family has roots. (The book is dedicated “In loving memory of my Kashmiri grandparents.”)

No prior knowledge of the political situation in Kashmir is needed to enjoy “Shalimar the Clown,” since Mr. Rushdie, as usual, serves his fantasies with generous helpings of historical fact. Kashmir, the reader will quickly learn, is a pastorally lovely region that has the misfortune to lie on the border between Pakistan and India. After partition, in 1947, the Hindu ruler of the majority-Muslim province opted to join it to India, but Pakistani soldiers quickly moved in to claim part of the territory. Since then, the rivals have skirmished constantly and fought two full-scale wars over control of Kashmir. In 2002, it seemed very possible that they would resort to nuclear war to settle the matter once and for all.

Kashmir, then, like Northern Ireland and the West Bank, is one of the most intractable and dangerous political problems in the world. But in the end, Mr. Rushdie does not go much deeper into the tangled roots of the current impasse than he did in a 1999 newspaper column, collected in his book of essays, “Step Across This Line”: “For over fifty years, India and Pakistan have been arguing and periodically coming to blows over one of the most beautiful places in the world, Kashmir, which the Mughal emperors thought of as Paradise on earth. As a result of this unending quarrel, Paradise has been partitioned, impoverished, and made violent.”

If this sounds more like a fairy tale than an explanation, that only makes it the more suited to Mr. Rushdie’s brand of fiction, which has always been more mythic and cinematic than realistic. In fact, it is precisely because Mr. Rushdie does what he does so well in “Shali mar the Clown” that the book so clearly exposes the limitations of his style. The novel decries evil – terrorism, fanaticism, violence – but cannot begin to explain it. Set against the profound investigation of these subjects in, say, “The Possessed,” Mr. Rushdie’s treatment seems cartoonish. It would be fairer to say, however, that “Shalimar the Clown,” like all Mr. Rushdie’s best work, has the energy and color and speed that only cartoons can offer.

A summary of the plot suggests Mr. Rushdie’s ability to combine melodrama and picaresque in a contraption of Rube Goldberg complexity. As the book opens, India Ophuls, a beautiful young woman living in 1980s Los Angeles, sees her beloved, mysterious father, Max, assassinated on her doorstep. (Mr. Rushdie’s decision to name one of his major characters after a famous movie director, for no evident reason, is exactly the kind of thing that tickles some readers’ funny bones and sets others’ teeth on edge.) The culprit is Max’s driver, known as Shalimar the clown, to whom India has earlier felt inexplicably drawn: “Her heart leapt. A driver from paradise. His hair was a mountain stream.”

The novel then jumps back to Kashmir in the 1960s, to unfold the hidden roots of the crime. Shalimar, we learn, was the stage name of Noman, a young tightrope-walker from Pachigam, a village known for its troupe of clowns and actors. Though Noman was a Muslim, he was encouraged by the village elders to marry his true love, the Hindu dancer Boonyi: In Mr. Rushdie’s idyllic vision, the Kashmir of old was untroubled by hybridity. But as the village is gradually divided by the forces of politics, economics, and religion, so Shalimar and Boonyi’s romance sours. She yearns for a grander life than Pachigam can offer, and her opportunity comes along when Max Ophuls, the American ambassador to India – Mr. Rushdie makes him the successor to John Kenneth Galbraith – sees her perform and falls in love.

For all the lyricism of Mr. Rushdie’s prose – and the novel is full of quaint villagers, besotted lovers, and rhapsodic descriptions of nature – the plot that ensues is unrelievedly grim. When Boonyi abandons Shalimar, he falls in with the “iron mullah” who has begun to preach jihad in the village. (In a typical magical-realist touch, the cleric is literally made of iron, and when he dies, he collapses into a pile of machine parts.) Mr. Rushdie sends Shalimar on a tour of the Islamic terror circuit in the 1980s, showing how Pakistani intelligence, Taliban warlords, and Philippine revolutionaries form a network of hatred. For Mr. Rushdie to take on real Islamic terrorist groups, directly and by name, is an act of genuine courage; the fatwa, after all, has only been suspended, not revoked. At one point, he even imagines Shalimar assassinating a writer very much like Mr. Rushdie himself: “The man he was going to kill was a godless man, a writer against God, who spoke French and had sold his soul to the West. That was all he needed to know.”

The novel’s moral forthrightness, however, does not make for moral sophistication. The only thing resembling an explanation for fanaticism, in “Shalimar the Clown,” is sexual frustration. Shalimar becomes a terrorist after being rejected by Boonyi; General Kachhwaha’s cruelty is directly attributed to his unfulfilled lust; even the villainous Gegroo brothers are rapists before they become jihadis. As an etiology for political evil, this seems a little reductive. And it fits in all too easily with Mr. Rushdie’s fictional philosophy, which has always seen fecundity – literary as well as sexual – as the antidote to sterile purity. This is part of the truth, just as “Shalimar the Clown” has some of the qualities of a great novel. But it is clearly not the whole truth, of the kind that a more realistic and psychologically curious novelist might discover. Mr. Rushdie’s new novel reminds us that there are some things even his potent brand of magic cannot do.