The group, headed by former 9-11 commission leaders Tom Kean and Lee Hamilton, laid out a detailed description of domestic terror incidents ranging from the Fort Hood, Texas, shooting spree and the attempted Christmas Day airliner attack in late 2009 to last May's botched truck bombing in New York's Times Square.
Over the past year, terrorism experts and government officials have warned of the threat posed by homegrown radicals, saying terror recruits who go abroad could return to the U.S. to carry out attacks.
But the U.S., the group said, should have learned earlier from Britain's experience. Prior to the 2005 London suicide bombings, the British believed that Muslims there were better integrated, educated and wealthier than their counterparts elsewhere.
Similarly, the U.S. believed that its melting pot of nationalities and religions would protect it from internal radical strife, the report said.
The terrorists, said the report, may have discovered America's "Achilles' heel in that we currently have no strategy to counter the type of threat posed by homegrown terrorists and other radicalized recruits."
U.S. officials have acknowledged the need to address the radicalization problem, and for the first time, the White House this year added combating homegrown terrorism to its national security strategy.
The National Counterterrorism Center and a National Security Council interagency group of representatives from 13 federal agencies and offices have taken the lead in looking at ways to counter violent extremism within the U.S. and abroad, Denis McDonough, the chief of staff of the president's National Security Council, said in an interview with The Associated Press in June.
The effort includes officials from the departments of Defense, Education, Health and Human Services, Homeland Security, Justice and State.
The administration's response includes a "new interagency effort that brings together key stakeholders" and continued "outreach to communities across the country," said Ben Rhodes, the White House's deputy national security adviser.
The FBI, meanwhile, has worked to reach out to the Somali communities, in an effort to counter the radicalization of the youth.
The report also points to an "Americanization" of the leadership of al-Qaida and its allied groups, noting that radical cleric Anwar al-Awlaki, who had links with suspects in the failed Times Square bombing and the Fort Hood shootings, grew up in New Mexico. And Chicagoan David Headley played a role in scoping the targets for the Lashkar-e-Taiba attacks on Mumbai in late 2008 that killed more than 160.
Abroad, Al-Qaida, its affiliates and other extremist groups have splintered and spread, seeking safe havens in undergoverned areas of Pakistan, Yemen, Somalia and places in North and East Africa. That diversified threat has intensified as militants reach out to potential recruits through the Internet.
Assessing future threats, the report lists potential future domestic targets, including passenger jets, western or American hotel chains, Jewish or Israeli sites and U.S. soldiers, even at their own bases in America.
And it also warns that it is no longer wise to believe that American extremists will not resort to suicide bombings. As an example they point to Army Maj. Nidal Hasan, who has been charged with killing 13 people and wounding 32 in last year's shootings at Fort Hood, saying he had written about suicide operations in e-mails, and that his attack appeared to be one.