In the first in a series of speeches during his campaign to win the Tory leadership, the former chancellor said: "If the Prime Minister really believes it, he must be the only person left who thinks that the recent bombs in London had no connection at all with his policy in Iraq."
He added: "Sensible members of the public know perfectly well that misjudgements over Iraq have made the UK a more dangerous place for its citizens. The public knows it; all politicians should have the courage to say so."
Although Mr Clarke conceded that the "disastrous" decision to invade Iraq did not create the danger of Islamic terrorism in Britain, he insisted it had made it a more dangerous place. He would have accepted that increased risk if the war had been a "just cause", but said the reasons for joining the invasion were bogus.
His decision to play the Iraq card was an attempt to highlight what aides called his "good judgement" in opposing the war. Although most Tory MPs voted for military action, Mr Clarke insisted that many MPs and party members now shared his views on the issue.
The 65-year-old political heavyweight, who described himself as midway through his career, directed his fire at Mr Blair rather than his rivals for the Tory crown. He adopted a strongly liberal approach to anti-terrorism laws, accusing the Prime Minister of a knee-jerk rush to legislation through "moral blackmail" and "unhelpful and undignified" attacks on judges.
He warned that bringing in new laws after every terrorist atrocity could be counterproductive, saying they could feed a sense of panic and enhance the grievances from which the terrorists hoped to derive sympathy. "You do not beat the enemies of freedom by taking freedom away," he said, warning that moderate Muslims were being alienated.
The former home secretary rejected plans to detain suspects without trial for up to three months and called for an independent body to report to Parliament on anti-terrorism powers. He said the role of the Association of Chief Police Officers, "in effect a trade union", should be placed under political scrutiny.
He dismissed as "spin" from Downing Street the notion that "mad mullahs" were the most significant creators of the new dangers Britain faced. "No amount of preaching itself ever made any person turn to the barbaric practice of suicide bombing," he said.
Mr Clarke argued that draconian laws would not make the country any safer and that a political response was need to resolve the conflict with the Muslim world. "The roots of our present terrorism lie in the Middle East and in a series of conflicts around the world," he said.
He conceded that the US and Britain could not "just walk out of Iraq", which would allow the insurgents to win. But he called for a change of strategy, warning that US military tactics were alienating moderate Iraqi opinion and saying that the US had to accept that an "anti-American element" would be part of the Iraqi government.
Allies of Sir Malcolm Rifkind, the other Tory leadership contender to oppose the war, pointed out that Mr Clarke had changed his tune on Europe. Crispin Blunt, Sir Malcom's campaign manager, said: "Consistency and quality of judgement are vital characteristics in a potential prime minister. Malcolm Rifkind has shown judgement and foresight not only on Iraq but also on other key issues, such as Europe."Reuse content