The terrorist attacks of September 11, 2001, & the consequent 'war on terror' & the invasion & occupation of Iraq, has magnified the threat posed by Muslim immigrant communities residing in Europe. Terrorists responsible for the 9/11 attacks were Muslims who lived & trained in Western Europe. Since the last quarter of the twentieth century young European Muslims have been radicalized at a rate higher than ever before. This study examines the impact of government policies on immigrant Muslim communities residing in the United Kingdom & France. It explores whether policies of discrimination against these communities explain recent waves of terrorist attacks in these countries. Muslim communities in both countries differ in terms of ethnicity & tradition; however they are predominantly Sunni Muslims & migrants from former colonies. UK & France have their own idiosyncrasies. France is a Laic republic where religion is private, whereas Great Britain is a secular state where the Church continues its influence on politics. The study argues that government policies is an important variable however, it does not have a decisive impact on the radicalization of second generation Muslims.