Islamic fundamentalists want westerners out of the M.E. so that they can set up governments ruled by Islamic law. Shia fundamentalists want, in particular, to stir up a major conflict with the West to "hasten the day of the coming of the Mahdi," their savior they await. Particularly in light of their asking for war, they will come looking for conflict wherever they can find it. This means that pulling back to our own borders and "minding our own business" will not work.
What will work? That is a difficult question, indeed. I think part of our response should be, as in the past, keeping up a strong military as a deterant. More than in the past, though, we must be wiser in the battles we pick--pick the ones that seek to protect those innocent, while at the same time no longer try to build demoncracies for Islamic nations (which is now clear does not work).