SINCE TERRORISM IS A FORM OF CLANDESTINE, UNCONVENTIONAL WARFARE, WAGED WITHOUT HUMANITARIAN RESTRAINTS, IT MUST BE COUNTERED BY POLICE AND INTELLIGENCE FORCES. ARMED FORCES SHOULD NOT BE USED. TERRORIST SEEK RECOGNITION AS A SIGNIFICANT FORCE--A NEW AND THREATENING KIND OF ARMY; THIS THEY MUST BE DENIED. THE RANDOM SAVAGERY OF TERRORISTS CAN HAVE TWO EFFECTS ON DEFENSE PLANNERS: IT CAN MAKE TERRORISTS SEEM IMPORTANT IN TERMS OF THE UNPREDICTABILITY OF THEIR OPERATION AND EXTENT OF THEIR WEAPONRY OR IT CAN MAKE TERRORISTS SEEM ESSENTIALLY PATHETIC, THE CREATURES AS WELL AS THE MANIPULATORS OF MASS MEDIA. AS SUCH TERRORISTS ARE NOT DEFENSE THREATS, UNLESS AS THE AGENTS OF AN ENEMY POWER PERFORMING AN ASSAULT UPON A NATION. TERRORISM IS AN INCHOATE SUBJECT OF STUDY AND SHOULD BE APPROACHED WITH CAUTION. CONSIDERED AS A FUTURE AUSTRALIAN DEFENSE PROBLEM, IT SHOULD BE A POLICE, RATHER THAN PRIMARILY A DEFENSE MATTER. FOOTNOTES ARE GIVEN. (MJW)