We well know that Muslim extremists are at war with other civilizations. We know, too, that there is a struggle between Islamists and moderates for the soul of Islam. What we often fail to remember, however, is yet another overlapping dispute within Islam - between the Sunni and Shi'ite worlds. Pakistan, for instance, has a history of sectarian violence between Sunnis and Shi'ites dating back to the 1960s. Last week's coordinated terrorist attacks in Mumbai seem to have their roots in Pakistan, where Sunni jihadis who cut their teeth on murderous assaults against Shi'ites are now proving that they won't hesitate to slaughter Christians, Jews, Hindus or anyone else they regard as a deviant sect. All of this highlights a fact that should become increasingly relevant to the foreign policy planning of the incoming Obama administration, as well as to the next Israeli government: The line between jihad within Islam and jihad against non-Muslims is becoming more and more blurred. WESTERN observers tend to see the Islamic world in monolithic terms, thereby missing the basic fault line that characterizes the world's 1.5 billion Muslims: the divide between the Sunni majority and the Shi'ite minority. That divide, rooted in 7th-century disagreements over the succession to Muhammad, is becoming ever more salient. No view of the strategic reality in the Middle East - and of Iran's role in particular - can be adequate without taking it into account. The Sunni-Shi'ite schism fueled Sunni Arab dictator Saddam Hussein's devastating war on Shi'ite, non-Arab Iran - and on his own Shi'ite Arab subjects. The same schism is, in large measure, what lies at the heart of the sectarian violence in Iraq today. It also explains the insecurity of Bashar Assad of Syria, a country which is mostly Sunni but which since 1970 has been ruled by a small Shi'ite-like sect known as the Alawites. In the opposite manner, this schism dictates the political dynamics of Bahrain, where a Sunni minority rules a restive Shi'ite majority. In Lebanon, it motivates Hizbullah's brazen bid for Shi'ite supremacy, and finds Egypt and Saudi Arabia attempting to protect Sunni interests in the face of continued Syrian intervention. Since 1989, internecine Sunni-Shi'ite violence has claimed more than 4,000 lives in Pakistan, a predominantly Sunni country which has the second-largest Shi'ite population after Iran. The Sunni-Shi'ite divide also bears heavily on the question of Arabian crude oil, since some 45 percent of the world's proven oil reserves lie in Shi'ite territory. TRUE, the Sunni-Shi'ite rivalry is but one layer in the exceptionally complex and at times indecipherable matrix of Islamic politics. It is also true that it can occasionally be overcome, as when Persian Shi'ite Iran supports Arab Sunni Hamas because both share a radical agenda. But ever since Ayatollah Khomeini's 1979 revolution in Iran, Sunni establishments from Cairo to Baghdad to Amman, fearing a rising Shi'ite tide, got their backs up. Some Sunni caliphs - especially in Saudi Arabia, home to the extreme Wahhabi form of Sunni Islam - began to call Shi'ites a bigger threat to Islam than Christianity and Judaism. Jordan's King Abdullah spoke anxiously of a "Shi'ite crescent" reaching from Beirut to Teheran. In Egypt, the Arab world's largest Sunni country, Hosni Mubarak declared a couple of years back that "most Shi'ites are loyal to Iran, and not to the countries they are living in." The Saudi-Pakistani alliance, which underwrote both the Taliban and jihadis in Kashmir, was a marriage of convenience formed to counter Iran's Shi'ite influence. An Iranian diplomat was kidnapped earlier this month in Pakistan's northwest. More recently - and more ominously - some Sunni states declared their intention to acquire nuclear capabilities in response to Iran's ambitions in that direction. To paper over these differences, Iran has offered to share civilian nuclear technology with the Sunnis. We are seeing a new alignment of relatively moderate Sunni states, like Saudi Arabia, Jordan and Egypt, developing against Shi'ite extremist regimes in Iran, Syria and Hizbullahland. By factoring in the Sunni-Shi'ite divide even when we think about Pakistan and Mumbai, we register a phenomenon that threatens destabilization from India to Egypt.