Updated

Prime Minister Tony Blair warned the British people on Monday to be vigilant against terrorism, but said the country must not let fear distort normal life.

"If, on the basis of a general warning, we were to shut down all the places that Al Qaeda might be considering for an attack, we would be doing their job for them," the prime minister said at the annual Lord Mayor's banquet in London's financial district.

"If a terrorist thought that all he had to do to shut down the travel industry, for example, was to issue a threat against our airports, we really would be conceding defeat in the war against terrorism," Blair said.

Barely a day goes by without new intelligence about a threat to British interests, he said, adding that some of the information is reliable, but some may be misinformation or gossip. Responsible governments have to strike a balance.

The dilemma is warning people without alarming them, taking preventive measures without destroying normal life, Blair told a gathering of 750 officials, business leaders and others who arrived at the ornate Guildhall under heavy security.

The government would take what security measures it could, he said, urging businesses to ensure security precautions were implemented.

"All of us as citizens have to be alert, vigilant and to cooperate fully with the relevant authorities," Blair said.

He said the Al Qaeda terrorist network, blamed for last year's Sept. 11 attacks on the United States, would buy weapons of mass destruction if it could.

"Would it use such weapons? Definitely," Blair said.

He said disunity in the international response to terrorism — "Europe dividing off from the U.S., the Arab world versus the West, Muslim versus Christian" — was another danger.

There was a need to reach out to the Arab and Muslim world "above all we need to understand the passion and anger the state of the Middle East peace process arouses," he said.

Blair also called for full U.S. engagement and leadership on an international agenda broader than terrorism and weapons of mass destruction.

"President Bush recognizes that: witness the decision to go through the United Nations on Iraq, the new relationship between NATO and Russia, last June's agreement on a plan for Africa agreed at the G8."

Home Secretary David Blunkett, Britain's top law enforcement official, said on Sunday that the government could not fully protect people against the threat of attack, and he warned people to be particularly vigilant as Christmas approaches, especially at airports and large gatherings.

Last week, Britain's Home Office hurriedly withdrew a statement warning that Al Qaeda may be prepared to use a radiological device known as a "dirty bomb," or some kind of poison gas. That was replaced with a more general warning of terrorist threats.