For better and worse, Italy has long been the political and cultural laboratory of the Western world. From the glory days of Rome, through the Renaissance and the various nation-states, into the experiment at nation building that is still very much a work in progress, Italy has tried out the best and the worst in us. Mafias and great philosophers of jurisprudence, totalitarian mass movements and terrorism of all political colorations, alongside glorious music and literature, brilliant cinema, and everything one could want at the dinner table. Much of this goes unobserved by those who have spent their lives studying the “major powers” (that is, big countries with bad weather), and a bit of attention to Italian matters can pay big dividends.

Like the rest of us, the Italians have a jihadi problem, and they have it for the usual reason: For a long time they refused to acknowledge the problem existed, and now they are trapped in a political and cultural web of political correctness and multiculturalism that they must undo if they’re going to be able to deal effectively with the problem. In the early 1980s, when I was special adviser to Secretary of State Haig, I traveled frequently to the Vatican to compare notes with one of John Paul II’s personal secretaries, an African with the beautifully syncopated name of Kabongo. One day he surprised me by suggesting it might be useful if somebody did a study analyzing the Vatican’s Islam policy. The best way to do that, Kabongo said, was quantitative: “How many churches have we built in their countries, and how many mosques have they built in ours?”

The answers were fairly well known. No churches had been built in Muslim countries, while thousands of mosques had been built in “Christian” nations. And, as Kabongo knew earlier and better than most, that was a big problem. The thoughtful Italian Muslim journalist Magdi Allam has put it most clearly: “Look around, we see a network of mosques that developed thanks to judicial arbitrariness and official indifference, handed over to self-appointed foreign imams, mostly representatives of Islamic extremists who have been declared criminals in Muslim countries themselves.”

These foreign imams are frequently apologists and even recruiters for the terror war. The “Union of Islamic communities and organizations in Italy” recently found legitimate the use of violence against the state whenever Muslims felt themselves discriminated against. But the Italian government has yet to act as the British and French have, by expelling radical imams and, in the French case, taking control of the mosques’ finances. On the contrary, the radical imams have become celebrities, treated with respect by the government and welcomed on evening talk shows.

The official respect for the self-proclaimed leaders of the Italian Muslims rewards celebrity rather than embracing a religious minority. As Allam insists, these official “leaders” are highly unrepresentative of the Italian Muslim community. A mere 5% of Italian Muslims regularly go to mosque. Most Muslims in the country – more than 100,000 of them – come from the Balkans, primarily Albania, where their religious upbringing was generally haphazard. A considerable number of Italian Muslims have quietly – in many cases, secretly – converted to Christianity. One of them, Brother Antuan, became the first ex-Muslim priest in Italy. The converts are mostly Albanians, but also Moroccans, Tunisians, Algerians, Bosnians, Nigerians, Somalis, and even gypsies. An Albanian who Allam calls “Nura” told him that the most common road to conversion comes through mixed Albanian-Italian marriages, and complained that while Christians who convert to Islam are respected, Muslims who convert to Christianity are afraid of reprisals, even in Catholic Italy.

These converts represent a threat to the monolithic Islamic world, a hope for Italy and, should we pay attention, America. These are people who are assimilating but do not get support from their new country. Nura can’t go back home unless she lies about her religious faith, and she wants the church to demand that Islamic countries permit freedom of religion on the same basis as the West does. And she also demands that the church itself take action on their behalf. “We feel abandoned. After conversion we have no one to protect us. … We ask for help from the Church and from Italy: Protect us! Help us!”

She launches a forceful call: “We must open the catacombs! When there is true freedom of religion, you’ll see how many come out. …” True freedom of religion requires that one be able to practice it free from attack.

“How long will Italy continue to tolerate the presence of those who consider themselves a distinct and potentially antagonistic body?” Allam demands, as we might well ask ourselves. Like us, Italians shrink at the very thought of state intervention in Muslim affairs, but Allam makes a telling point: “Like it or not, historically the State has always controlled Islam, because it’s a religion that cannot govern itself, given the subjectivity of the relationship between the believer and God … (and) the absence of a single spiritual authority.” That is why the most powerful Muslim groups in Italy are run from outside the country, either by foreign nations (especially Saudi Arabia) or by the terror network (as demonstrated by the many arrests of would-be terrorists).Thus, continues Allam, either the Italian state will regulate Italian Islam, or it will be done by the Muslim Brotherhood, the jihadis, or the Wahhabis.

All these groups, he notes, are illegal in most Muslim countries but free to operate in Italy. He’s got a program: “Entrust the mosques to those who simply want to pray, uproot the machinery of hate that threatens the life and liberty of us all.” And not just Italians. A radical Islamist cell in Milan that operated between 1997 and 2001 provided two terrorists involved in the assassination of Sheikh Massoud in Afghanistan, just days before September 11, 2001. Others were involved in a failed scheme to bomb the central railroad station in Milan in late 2000, and yet another was trained to drive a suicide vehicle into the American military base in Mondragone, near Caserta.

A program of the sort Allam proposes requires a radical rejection of the doctrines of political correctness that have dominated all Western countries for more than a generation. Pope Benedict hinted at the necessity of such a change on his recent trip to Germany (a change he might well initiate within some Italian Catholic organizations, which have greatly facilitated the Muslim influx, regardless of security concerns), and it seems that there are hopes for a new cultural awareness in the Netherlands, where the murders of Pim Fortuyn and Theo van Gogh shocked the Dutch into a re-examination of their wide-open toleration of most everything the human mind can conceive.

It also requires a recognition that the entire European project contributed mightily to the crisis in which it now finds itself. When the major powers broke with America over the liberation of Iraq, they “transformed an understandable dissent into a substantial retreat from the struggle against terrorism.” Those are the words of Paolo Mieli, the editor of the country’s leading newspaper, the Corriere della Sera. And he adds his voice to the chorus: “The dissolution of the European Union begins with having accepted the role of Achilles heel of the West in the face of terrorism.”

But recognition of past failures will not inspire the Italians to defend their assimilationist Muslims against the jihadis; for that to happen, the Italians will have to rediscover their own identity. This was forcefully argued by the president of the Senate, Marcello Pera, in a speech in Madrid on the 4th of July. Pera spoke at Jose Aznar’s institute, and he asked his audience to recall the reaction of the Europeans to the murderous attacks in Spain. “Have we perhaps vindicated our identity of Jews and crusaders? Do we feel proud of it? The reverse is true. In the face of fundamentalism and Islamic terrorism, the West has been pervaded by a sense of resignation, repression and even surrender. “And so the West today seems to be “a land of penitents beating their breast whenever someone strikes them.”

Pera, who is not a person of faith, nonetheless insists that “we are Christians, or more precisely, Judaeo-Christians in our history when we are not so by our faith,” and he insists that the West cannot possibly win the war against terrorism unless Westerners rediscover themselves, reassert their values, and thereby understand the nature of the war itself.

It may be hard to be optimistic about Italy’s chances to turn around a very vexing situation, but at least some of the country’s leading voices are asking the right questions and proposing some serious policies. Here, as yet, it is still forbidden to ask for action against radical mosques and schools, or for recognition that many Muslims are intimidated by the jihadis in their communities. Which takes us back to the starting-point: Watch Italy, it’s our laboratory.

Mr. Ledeen is resident scholar in the Freedom Chair at the American Enterprise Institute and author of “The War Against the Terror Masters.”