WASHINGTON -- A new Department of Defense program allows traders to bet on the likelihood of future terrorist attacks.

The department's "Defense Advanced Research Project Agency" designed what it calls the "The Policy Analysis Market."

The program works much like the financial markets where traders buy and sell "futures" based on the possibility of a specific event in the Middle East, 11 News reported.

Some of the examples listed on the agency's Web site include the assassination of Palestinian leader Yassar Arafat and a missile attack by North Korea. Bidders would profit if the events for which they hold futures occur.

Defense officials said the market-based system is highly accurate when assessing such things as political and civil stability, economic health and military disposition of Middle East countries.

Participants would only have to pick a username and password to participate and the agency said it won't have access to their identities or funds.

But critics said this allows terrorists who are planning an attack to profit on the assault or even make false bets to mislead authorities.

Members of Congress said the market idea is not only wasteful, but repugnant.

"I think this is unbelievably stupid. That is a gentle thing to say about a program that is so devoid of value," Sen. Byron Dorgan, D-North Dakota, said. "It combines the worst of all our values in my judgment. It's a tragic waste of taxpayer money. It will be totally offensive to almost everyone."

"[The] idea of a federal betting parlor on atrocities and terrorism is ridicules and grotesque," Sen. Ron Wyden, D-Oregon, said. "The bizarre plan we are describing today is a waste of taxpayer money and it needs to stop immediately. The program's intent is clear: the federal government is encouraging people to bet on and make money from atrocities and terrorist attacks."

Registration for the site begins Friday and will be limited to the first 1,000 traders. Actual trading will begin Sept. 1 and the Department of Defense plans to open the site to 10,000 traders by Jan. 1, 2004.

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