Hamas’s election victory shocked the West. “I don’t see how you can be a partner for peace if you advocate the destruction of a country as part of your platform,” President Bush said at a January 26 news conference after the results were announced. Subsequently, Washington cut off aid money to the new Hamas-dominated government, yet the White House’s resolve was not matched elsewhere. Two weeks after the election, Turkey’s ruling Justice and Development Party feted Hamas political leader Khalid Mishaal, a wanted terrorist. And earlier this month the Swedish government broke European consensus to issue a visa for a Hamas minister to attend a conference calling for the Jewish state’s destruction. Moscow has even suggested supplying arms to Hamas.

How timely it is then to read Matthew Levitt’s “Hamas: Politics, Charity, and Terrorism in the Service of Jihad” (Yale University Press, 334 pages, $26). In an age of instant experts and television terrorism analysts, Mr. Levitt is the real thing. A former FBI counterterrorism analyst, he currently serves as deputy assistant secretary of the Treasury for intelligence and analysis.

Mr. Levitt parses many news reports, NGO studies, court proceedings, and legal documents (although he draws on very little Arabic-language material) to separate the false rhetoric from the reality about Hamas. He lays bare the popular notion preached by European diplomats that Hamas sports distinct political, social, and military wings, or that it differentiates between military and civilian targets. For example, the political leader of Hamas in Tulkarm, Abbas al-Sayyid, put on his military hat to mastermind the March 27, 2002, bombing of a Netanya hotel Passover Seder, a civilian target. Hamas participates in the political process and supports social networks only to advance its core mission, the destruction of Israel.

Mr. Levitt’s sketch of Hamas’s history and development is also useful. It has become trendy in certain circles to suggest Hamas’s rise to be blowback from earlier support by Israel. A Center for Strategic and International Studies Middle East analyst, Tony Cordesman, for example, told United Press International that Israel “aided Hamas directly – the Israelis wanted to use it as a counterbalance for the PLO.” Mr. Levitt corrects such musings in a chapter tracing the group’s deep roots in the Muslim Brotherhood. It is true that Israeli officials lent support to nonviolent Islamist organizations during the first intifada (1987-93), but Hamas was not among them, even if Hamas later absorbed once non-violent civil society organs. Perhaps Israeli officials were naive to engage moderate Islamists, but if so, Western calls for outreach to Hamas simply replicate past mistakes.

Mr. Levitt’s analysis is nuanced further through its juxtaposition of the seeming moderation of some Hamas officials inside the West Bank and Gaza and the external radicals. Here he warns against comparison: In the West Bank and Gaza, Hamas moderates its rhetoric and actions out of fear of the Israeli military, not of conviction. It is simply easier for the Damascus-based Mr. Mishaal to solicit Iranian funds than for those in Gaza within reach of Israeli forces.

Any serious terrorism analyst understands the importance of a money trail. Mr. Levitt makes an exceptional contribution with a chapter on “economic Jihad.” He demonstrates how Hamas launders money and uses charities to subsidize terrorism. One fatwa – issued from a Saudi governmental body – even makes it permissible to use non-Islamic, interest-bearing banks to transfer money, so long as it is used to finance jihad. On April 28, President Chirac of France argued, “[F]inancial aid to Palestinians has to be maintained for human and political reasons.” Mr. Levitt shows how Hamas twists such humanitarian aid to prove that the policy is inane. The group emphasizes early education radicalization and teaches elementary school students to venerate suicide bombers. Incitement matters. Between 2003 and 2004, children’s involvement in terrorism increased by 64%.

Hamas’s financial operations extend to America. The FBI has investigated Hamas’s links to drug trafficking, credit card fraud, sale of counterfeit products, and cigarette tax fraud. Such operations provide between $20 million and $30 million annually to Middle Eastern terrorist groups like Hamas.

Most gripping is Mr. Levitt’s breakdown of the cost of an attack. A November 27, 2001, shooting attack on the Afula central bus station cost $31,000; the July 31, 2002, attack on a Hebrew University cafeteria that killed seven, including five Americans, cost $50,000. In contrast, the Holy Land Foundation, a prime financier of Hamas, raised $57 million between 1992 and 2001.

Not all cash goes directly to operations, though; donations also finance aid to the families of suicide bombers and Hamas’s social service-recruitment division. While no formal affiliation exists between Hamas and Al-Qaeda, Mr. Levitt highlights numerous financial links between the groups and raises questions about whether such ties could be made operational, either officially or through rogue cells.

While Mr. Levitt focuses on Hamas, J. Millard Burr and Robert Collins look more broadly at terrorism finance in “Alms for Jihad: Charity and Terrorism in the Islamic World” (Cambridge University Press, 343 pages, $28). The two are well-matched to collaborate: Mr. Burr, a former USAID relief coordinator in Sudan, provides practitioner reality, while Mr. Collins, a well-published African historian, adds academic depth. They begin with an examination of zakat, Islamic alms. They explain the difference among zakat, religious gifts, and endowment, and show how they can all be used to similar ends.

Lay Muslims once looked at zakat as just another tax levied by their governments. However, the Muslim Brotherhood-run mosques began collecting alms to fund jihad. Messrs. Burr and Collins demonstrate this with a number of case studies covering Afghanistan, Sudan, the Balkans, Russia, Central Asia, Southeast Asia, the Holy Land, Europe, and North America. Throughout, the Saudi royal family played a pernicious role, founding and promoting charities to spread militant Sunni Islam, not only as an inoculation against resurgent Shi’ism from revolutionary Iran, but also to radicalize the Muslims in Europe and America.Western bungling amplified the charities’ success: Soviet leader Mikhail Gorbachev’s perestroika enabled Islamist charities to sink roots in Chechnya, while in the next decade, the Clinton administration delayed investigations into charities like the al-Haramain Islamic Foundation out of deference to its Saudi royal family patrons.

Messrs. Burr and Collins’s examination of Islamic banking is rich with both historical background and contemporary detail, some of which may surprise: They show how groups like Palestinian Hamas, Algeria’s Islamic Salvation Front, Tunisia’s al-Nahda, and Egypt’s Jama’at al-Islamiyya all held shares in the Saudi-based al-Taqwa bank. And though the authors do not discuss Turkey, the fact that Prime Minister Erdogan of Turkey has quietly replaced every member of the Turkey’s banking board with members drawn from Islamic banks is another cause for concern. Still, even though Islamist terrorists began targeting their Saudi patrons, Messrs. Burr and Collins demonstrate how there remains virtually no government oversight into charitable donations anywhere in the Muslim world.

While “Hamas” and “Alms for Jihad” detail the networks through which terrorist groups grow, Fawaz Gerges, a professor at Sarah Lawrence University, takes a more holistic approach in “Journey of the Jihadist” (Harcourt, 296 pages, $25). He seeks to “delve into the world of Islamic militancy,” but his narrative falls flat. Based on interviews with a few Islamists, Mr. Gerges’s account is all color and no substance. To conclude, he paraphrases an Egyptian Islamist who faults American policy for forcing a reaction from Islamists; this is the logical equivalent of exculpating rape because the victim wore a short skirt.

Messrs. Levitt, Burr, and Collins demonstrate that terrorism is not the spontaneous response to grievance. Never has the gap between reality and the conventional wisdom peddled by Middle Eastern studies doyens like Mr. Gerges appeared so great.

Mr. Rubin, editor of the Middle East Quarterly, is a resident scholar at the American Enterprise Institute. He last wrote for these pages about the Iraq war.