The victories, once hard to imagine, have become increasingly common in this part of the world, on what’s often called the second front in the global War on Terror. Indonesia, Southeast Asia’s largest nation, has captured more than 400 militants since 2002, hobbled JI and avoided a major bomb attack for nearly two years. Meanwhile, the Philippines has managed to liquidate half the terrorists on Manila’s most-wanted list and drive the Qaeda-linked Abu Sayyaf group from its main bases. Malaysia and Singapore have rolled up terrorist cells of their own and thwarted several planned attacks. At last, “the glass looks half full,” says Ken Conboy, a JI expert and author of “The Second Front: Inside Asia’s Most Dangerous Terrorist Network.”

Of course, it’s too early to declare victory. In recent weeks, Philippine militants killed scores of Marines in the southern Mindanao region and the Australian government issued an advisory against traveling in Indonesia. But throughout the region, violence is on the wane—except in southern Thailand (sidebar). Many observers say the tide has turned. And what’s most interesting about the victories is how they’ve been accomplished: using strategies that could teach Washington a whole new way to wage this kind of war. The key? Avoiding overwhelming military might or brutal tactics in favor of smart, focused operations mounted in concert with broad hearts-and-minds campaigns. Just as important, Southeast Asian states have kept Western support indirect and—relative to operations in Afghanistan, Iraq and Somalia—relatively modest. The Americans, for example, have provided funding and counterinsurgency training to police in Indonesia and soldiers in the Philippines, but have sent no combat troops to either country.

Few would have predicted such major successes early in the decade. In the aftermath of the September 11 attacks—which were conceived and partly planned in Southeast Asia—Indonesia seemed to be in complete denial about its homegrown extremists, despite warnings from local and U.S. intelligence that JI had links to Middle Eastern and South Asian jihadists. Historically, radical Islamist political parties had never been popular in Indonesia, and extremist groups had been brutally suppressed by Suharto’s military dictatorship. But after Suharto fell in 1998, Indonesia’s transition to democracy ushered in a quick succession of hapless leaders. JI used the opportunity (and government fears of looking “un-Islamic”) to grow. After 9/11, radical groups like the Indonesian Mujahedin Council openly started pushing to turn Indonesia into an Islamic state and seemed to be gaining ground. Analysts warned of a “creeping fundamentalism” that the government seemed unable or unwilling to do anything about.

Then came the Bali attacks of October 2002, when JI bombed two discos and killed 202 people, mainly foreign tourists. Suddenly Jakarta was forced to confront the horror on its doorstep. JI was found to have links to Al Qaeda. Other local groups, such as the Laskar Jihad and Laskar Mujahedin, began waging jihad against Christians in Indonesia. Still others, like the Islamist Defenders Front, commenced vigilante campaigns, smashing bars and other businesses deemed un-Islamic. Finally, the government swung into gear. Its first step was to improve the quality of its national police. Spun off from the military in 1999, the force was underfunded, poorly trained and ill equipped. But after Bali, aid from the United States, Australia and Britain began flowing in. The support included advisers, high-tech surveillance equipment and funding for training schools, forensics and DNA-testing facilities. Indonesia established two armed counterterrorist units, known as Detachment 88 and Team Bomb. Both are considered model units today, and have racked up impressive arrest records.

From day one, Jakarta knew it had to paint the campaign against JI as a domestic affair. Although the vast majority of Indonesia’s 190 million citizens are religiously moderate, disdain for U.S. foreign policy is widespread so any overt American role would have raised hackles. Jakarta’s First World allies understood the imperative. “Taking a back seat as a foreigner [was] paramount,” says one former Western counter-terrorism official in Indonesia who asked not to be identified because he has retired. Throughout, Indonesian forces took the lead in counterterrorism operations, with Western countries supporting them from behind the scenes.

Jakarta also realized it could accomplish more with a velvet glove than a mailed fist. Accordingly, it instructed police to use much gentler interrogation tactics than they had in the past. JI terrorists in custody were given special treatment if they agreed to cooperate, including money for their wives and children and phones to call home. Coercive methods like shouting, beating and sleep deprivation were strictly forbidden and largely abandoned, something that outside experts like Conboy confirm. The goal? To persuade terrorists to help the police and to deprogram them from radical Islam. “I don’t want to compare this to Abu Ghraib,” says Ansyaad Mbai, head of the Indonesia’s counterterrorism coordinating body, but “the police are aware that if they use physical force on the terrorists, they will become more militant and [withhold] information.” The strategy seems to have paid off; though there are still complaints about the counter-terror squads’ rough arrest tactics, the change in interrogation methods has won over numerous radicals. Mbai says that the government captured Zarkasih and Abu Dujana after JI members in custody told the police their whereabouts.

A similar strategy was employed in the southern Philippines, where the Abu Sayyaf group has been fighting to create a fundamentalist Islamic state (in the Mindanao region, particularly the islands of Sulu and Basilan) since 1991. Thought to have 500 armed members at its peak in 2001, the group advocates an extreme version of Islam and has known links to JI. It has claimed responsibility for numerous attacks on Philippine citizens over the years; in July, Human Rights Watch blamed it for the deaths of almost 400 civilians in Mindanao alone.

To strike back, Manila launched a campaign called Oplan Ultimatum one year ago. The Philippine military started by targeting Basilan, where it succeeded in uprooting Abu Sayyaf from its birthplace. Remnants of the group then fled to Sulu. The Americans helped the campaign by providing logistical aid, intelligence for combat operations and training in night combat and information gathering. Washington also kicked in funding for anti-poverty programs. But throughout it all, the Americans stuck to the background. “This is their fight, their operation,” said Col. David Maxwell, head of the U.S. advisory force.

Like Indonesia’s antiterror police, the Philippine military realized that winning the battle would require soft as well as hard power. Accordingly, it began promoting what it called CMO, or Civil-Military Operations. These aimed to deprive the terrorists of mass support by improving local conditions. Sulu, a largely Muslim island with about 600,00 inhabitants, is poor, often neglected by Manila and lacking in basic infrastructure. So the military—with U.S. funding and aid—began a range of aid projects, building public toilets, bridges and hospitals; repairing dilapidated mosques, and providing medical and dental services to villagers. The charm offensive paid off in very real terms: for example, Abu Sayyaf leader Khadafy Janjalani was killed after a local villager, grateful to Philippine Marines for installing a water system in his community, led them to the terrorists’ camp. By last year Abu Sayyaf had been whittled down to fewer than 200 fighters.

Despite the recent successes, neither Indonesia nor the Philippines have fully eliminated their terrorist threats. JI may even be regrouping. “They’re not blowing things up but, in a larger perspective, these guys are adopting the Hamas model of social welfare with a very small, clandestine militant group,” says Zachary Abuza, a JI expert at Boston’s Simmons College. With more than 100 million Indonesians subsisting on less than $2 a day, there are fears that poverty will breed further radicalism. Indonesian and Western counterterrorism officials also complain that Saudi money continues to flow in to fund madrassas—or religious schools—that specialize in radical Wahhabi teaching.

Meanwhile, in the Philippines, Abu Sayyaf remains a threat, according to the government, and the danger of a big bombing remains real in both countries. But it’s important to note that 2007 could go down in history as the first year in recent memory that a major terror attack didn’t happen in either place. And it’s important to remember how that victory was achieved: through subtle, sophisticated tactics that proved more effective than the overwhelming and often brutal approach now favored by Washington. If the progress holds, it’ll spell some rare good news, both for the region and—if the approach is adopted in other settings—for the global War on Terror at large.