Suspected terrorist mastermind Osama bin Laden has succeeded beyond his dreams and created a world of fear in which there is growing confrontation between Muslims and the West, Prime Minister Mahathir Mohamad said today.

"He has made the whole world frightened, people are frightened to do anything," Mahathir said of the al-Qaeda leader who has claimed responsibility for the Sept 11 terror attacks on the United States.

"Osama bin Laden ... I think he may have succeeded beyond his dreams.

"And why has he succeeded? Because we are angry, we don't know how to manage these things, and we fall into his trap," he said.

Mahathir acknowledged that the US congressional election results were "a vote of confidence in the policies" of President George W Bush, including his threat to attack Iraq.