Tony Blair has told MPs that the international community is still not doing enough to face up to the global terrorist threat.

Delivering a Commons statement on the NATO summit in Istanbul, the prime minister expressed his concern that the scale of the terrorist threat was still being underestimated.

He linked NATO's commitment to stabilising both Iraq and Afghanistan as vital to the protection of Britain's national security.

The summit coincided with the transfer of sovereignty in Iraq, which Blair hailed as a a major step forward.

"Britain can be proud as a country of the role that we, and in particular our magnificent armed forces, played in bringing this about," he insisted.

But he accepted that in Iraq terrorism remained the main challenge, with insurgents aiming to "create chaos".

The prime minister said NATO would help the interim government improve its capabilities to deal with the threat.

And Afghanistan still faced "huge challenges", said Blair, although the country was making progress.

"But again terrorists, with the same intent as in Iraq, stand in the way," he said.

New threats

NATO's role in the two countries reflect the new threats faced by the international community, said Blair.

"Both now have the hope of a new dawn, but are confronted by the remnants of the past they seek to escape."

Blair warned that if the alliance failed, both countries could "sink back into degradation", repressing their citizens and threatening the security of the region and the wider word.

"This terrorism we face now is not confined to any one continent, let alone any one country," he told MPs.

"From Saudi Arabia to the cities of Europe it is there, active and planning.

"Since September 11, 2001 in New York we have known its potency.

"So what now happens in Iraq and Afghanistan affects us here, as it does every nation, supportive or not of the actions we have taken.

"NATO's focus on these issues shows at least a start to understanding this threat and its implications, but I worry frankly that our response is still not sufficient to the scale of the challenge we face."

Blair also said there should be a focus on the causes of terrorism, with progress required on the "vital strategic necessity" of agreement on the Middle East peace process.

"But the battle is here and now in Iraq and Afghanistan," said the prime minister.

"Even for those who passionately disagreed with our decision to go to war, the issues are now clear.

"The side we should be on [is] without doubt and the cause manifestly one worth winning.

"Succeeding in it would be a fitting way to reinvigorate the transatlantic alliance and heal its divisions."