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Does the administration of George W Bush have a zero-tolerance policy on terrorism or not? That's the charged question facing the US government as it dithers over the case of Luis Posada Carriles.

The facts are not in dispute. Posada was a key figure in the 1976 bombing of a Cuban airliner that killed 73 people. A Cuban exile, Posada and his group were backed by US security forces and he was viewed as a "CIA asset." His ostensible mission, working mainly out of Venezuela, was to contain left-wing subversives who were trying to bring down Venezuela's government.

Posada was arrested after the bombing, but he escaped from a Venezuelan jail 20 years ago. Now 77 years old, he is in the US, having been held by immigration authorities, seeking asylum. The Venezuelan government, which has an extradition treaty with the US, is demanding that Posada be returned to them. Cuban president Fidel Castro has echoed the call. But the US government has not yet taken any official action.

It is easy to understand the Americans' hesitation. If they admit that Posada is a terrorist, then they also admit that the US government once supported terrorism. Of course, it is hardly a secret that, during the Cold War, America backed right-wing dictatorships and tried to destabilise leftist ones. But this is irrelevant, since governments do not like to admit wrongdoing of any sort.

The Fidel factor is also at work here. Although Venezuela is the officially aggrieved party in this matter, it was a Cuban plane which was bombed and mostly Cubans who were killed. But, despite the Cold War being over for more than 20 years, America continues its irrational enmity towards Cuba. That enmity is driven by nothing more than wounded pride - that a small island nation has been able to resist for so long the superpower monolith right in its front yard. So to give way on even such a relatively small matter would, for the Bush administration, be deeply embarrassing.

But it is George W Bush's anti-terrorism rhetoric which has put his administration in this pickle. "Zero tolerance on terrorism" was the rallying cry leading up to the invasion of Iraq - along with, of course, the now infamous "weapons of mass destruction (WMD)." But, even before the invasion, commentators were pointing out that Bush was confusing the issue, since Saddam Hussein had absolutely no connection with 9/11 mastermind, Osama bin Laden. And the world now knows that there were no WMDs, that the Bush administration was aware that there were no WMDs, and that the invasion was driven at least partly by Bush's backers seeing a chance to make a lot of money.

And now his rhetoric has returned to bite Bush in his backyard. It is not that the Posada issue will demonstrate whether the US government is committed to an all-out war on terrorism. The world already knows it isn't since, ultimately, that war can only be won by fighting poverty, illiteracy, and religious fanaticism. But the Posada case is a political rallying point which will highlight the hypocrisy or the sincerity of the American president.