FBI Special Agent Anthony Hubbard (Denzel Washington) and his Lebanese American partner, Frank Haddad (Tony Shalhoub), intervene at the hijacking of a bus fully loaded with passengers, which contains an explosive device. The bomb turns out to be a paint bomb and the terrorists escape. The FBI receives demands to release Sheikh Ahmed (Ahmed Ben Larby) bin Talal, a radical Iraqi cleric who was suspected to have ordered the earlier bombing at the American embassy in Dhahran, Saudi Arabia who was captured and extracted while going to Lebanon by a group of American covert operators of Lebanese - American ancestry in the introductory scene of the film, who was then imprisoned in an undisclosed location after being extracted while the U.S. Government prepared to prosecute him for his role in the barracks bombing. Hubbard eventually comes into conflict with Central Intelligence Agency agent Elise Kraft (Annette Bening), as he takes a terrorist suspect into custody and arrests Kraft. Later, another terrorist threat is made and a Metropolitan Transportation Authority bus is bombed. The feds captures a man named Samir Nazhde (Sami Bouajila), who admits to signing the visa application of one of the suicide bombers in the course of signing many applications for student visas in his job as a lecturer. However, Kraft insists that Samir is not a terrorist and that his continued freedom is vital to the investigation.
The terrorist incidents escalate, including the bombing of a bus and a crowded theater, a hostage-taking at an elementary school, and the destruction of One Federal Plaza, the location of the FBI's New York City field office, with over 600 casualties. In spite of objections, the President of the United States declares martial law and the United States Army's 101st Airborne Division, under the command of Major General William Devereaux (Bruce Willis), occupies and seals off Brooklyn in an effort to find the remaining terrorist cells. Subsequently, all young men of Arab descent, including Haddad's son Frank Jr., are rounded up and detained in Downing Stadium. Haddad resigns in outrage. New Yorkers stage violent demonstrations against the Army and the profiling of the Arabs; the Army fights to maintain control. There are reports of Army killings.
