Leading article: An attempt to stir up new fears across the region

For the third time in two years, a thriving Egyptian holiday resort has been visited by death and destruction. Whoever planned the killings in Dahab was clearly intent not only on causing as much physical devastation as possible but on harming Egypt's economy and the country's recovering morale. It was an admirable, if vain, gesture that holidaymakers and Egyptians marched together through the resort yesterday in a show of defiance, even as the blood was being cleaned from the streets. The damage, however, has already been done.

As with similar attacks on resorts, not just in Egypt, it is the much-needed visitors who will be deterred, but the natives whose losses will be the greater. Most of the casualties from Monday's bombs were Egyptian. It is Egyptians whose businesses will suffer. The tourist industry brings in more than $7bn (£3.9bn) a year and employs more than one tenth of the workforce. The consequences will reverberate through the economy as a whole.

Egyptian officials have rightly been wary of jumping to conclusions about the group or groups that might have been behind the latest atrocity. Hasty judgements have invariably been wrong, as the former Spanish government's early assumptions about the Madrid bombings showed so graphically. After the previous two bombings in Red Sea resorts, Egyptian security officials blamed a small, new militant Islamic group operating locally and suggested the involvement of local Bedouin. Yesterday, 10 unnamed people were arrested, but it was not at all clear on what evidence.

That there were three synchronised bombings might suggest a link - if only inspirational - with al-Qa'ida. Some have suggested that the broadcast by Osama bin Laden might have been a cue for the attack. For its part, Egypt's home-grown militant Islamic organisation, the Muslim Brotherhood, denied any involvement. And so far, this rash of bombs at Red Sea resorts has not been on the same scale as the wave of attacks targeting foreign tourists that so devastated Egypt's tourist industry in the mid-Nineties. This is not, however, to belittle its significance.

This fresh outbreak of violence demonstrates the renewed vulnerability of Hosni Mubarak's regime. While the ageing leader has made small concessions to the idea of representation for groups outside the government - the Muslim Brotherhood is still a proscribed organisation, but individual supporters hold seats in Egypt's parliament - the overall climate remains repressive. The last elections were a travesty of the democratic process. This is fertile ground for fundamentalist opposition to grow.

The Dahab bombs also illustrate once again the volatility of the neighbourhood. Anti-Western feeling, rooted in the Palestinian question, rarely ran far below the surface in many parts of the region. For the past three years, however, it has had a new focus in the continuing US and British military presence in Iraq. The tensions over Iran's nuclear aspirations, the deteriorating security situation in Afghanistan, and above all, perhaps, the victory of Hamas in the Palestinian elections, suggest a region, and a population, that is in defiant mood where the Western world is concerned.

That Arab leaders, from Jordan and the Gulf states to Syria and even the Hamas-led Palestinian Cabinet, rushed to condemn the Dahab attack might appear a constructive development. But it doubtless also reflects the hard-headed calculation that Islamic militancy has the potential to destabilise their regimes. This fear is growing across the region; it will only be fuelled by the bombs among the holidaymakers at the Red Sea.