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Information Technology (IT) security is a growing concern for governments around the world. Cyber terrorism poses a direct threat to the security of the nations' critical infrastructures and ITs as a low-cost asymmetric warfare element. Most of these nations are aware of the vulnerability of the information technologies and the significance of protecting critical infrastructures. To counteract the threat of potentially disastrous cyber attacks, nations' policy makers are increasingly pondering on the use of deterrence strategies to supplement cyber defense. Nations create their own national policies and strategies which cover cyber security countermeasures including cyber defense and deterrence against cyber threats. But it is rather hard to cope with the threat by means of merely `national' cyber defense policies and strategies, since the cyberspace spans worldwide and attack's origin can even be overseas. The term “cyber terrorism” is another source of controversy. An agreement on a common definition of cyber terrorism among the nations is needed. However, the international community has not been able to succeed in developing a commonly accepted comprehensive definition of “terrorism” itself. This paper evaluates the importance of building international cooperation on cyber defense and deterrence against cyber terrorism. It aims to improve and further existing contents and definitions of cyber terrorism; discusses the attractiveness of cyber attacks for terrorists and past experiences on cyber terrorism. It emphasizes establishing international legal measures and cooperation between nations against cyber terrorism in order to maintain the international stability and prosperity. In accordance with NATO's new strategic concept, it focuses on developing the member nations' ability to prevent, detect, defend against and recover from cyber attacks to enhance and coordinate national cyber defense capabilities. It provides necessary - - steps that have to be taken globally in order to counter cyber terrorism.