U.S. officials appearing before a Senate panel Tuesday acknowledged concerns that terrorists may try to launch attacks in the United States in retaliation for a U.S.-led war against Iraq. But they sought to reassure senators they are working hard to prevent such attacks from occurring.

U.S. officials told the Senate Foreign Relations Committee they are monitoring potential Iraqi sympathizers in the United States who may try to launch retaliatory strikes on U.S. soil in the event of war against Iraq.

"We believe we have excellent coverage of those individuals and entities around the United States, and are very well positioned - in fact in the best position in the history of the FBI - to determine whether any such individuals are moving from the talking stage of 'here is what we may do in the event of hostilities' to national operation stage," said Jon Pistole, who is with the Federal Bureau of Investigation counterintelligence unit. "Our assessment is that there is limited activity in that regard, but there is still significant activity from a fundraising and recruitment perspective."

Another official, Juan Zarate, of the Treasury Department's Office for Terrorist Financing and Financial Crimes, reported progress in blocking assets of terrorist groups.

He said the United States has blocked more than $120 million in al-Qaida assets worldwide. "By working with our allies, in close contact with the State Department to implement an international mechanism for designation and freezing, we have made it much harder for terrorists to hide their money in the world banks and to move it through the financial channels," he explained. "We have also sent a common signal to bankers of terror: there will be no refuge from the gaze of the international community."

According to Cofer Black, the coordinator for counterterrorism at the State Department, recent arrests of top al-Qaida officials have dealt a blow to the terrorist network, which was behind the attacks on the United States on September 11, 2001.

"Al-Qaida is not the organization now that it was before. it is under stress organizationally," he said. "Its leadership is spending more time trying to figure out how to keep from getting caught than they do in trying to launch operations. Yet at the same time we have to be mindful there is certainty that terrorists will try to launch multiple attacks against their enemy, which is us and our allies."

Mr. Black warned that al-Qaida is going to great lengths to remain viable, including embracing certain issues that would make it attractive to local groups looking for resources.