Haplo - I been watching but not really commenting yet.
I agree about striking harder in the war, but not the way you wish to go about it.
Bombing (not nuking, i know) Medina, Mecca, or any other site, is going to create all sorts of repercussions with the more liberal of nations - read, the whole world. It was an "acceptable" tactic in ww2, but not really now.
Another key thing to remember is that those you fight are not interested in civilian casualties on their side, except for making use of the propaganda it brings. Buildings, people, holy sites - they're all viewed as expendable in the war against the great satan. Unfortunately, the reasoning you hope to apply (the destruction of their most holy sites) can't apply here, because they're happy to see you do it if there is the slightest chance it will work against you.
I'd venture to propose you adjust the tough policy to relax rules of engagement. Accountability is essential, you can't have the troops shooting willy nilly into completely civvy crowds, however go after the enemy and go hard A contradiction? No. take leaders and their entourages out as best as possible when they're away from apartment buildings - and accept that collaterals, civvy deaths, are unavoidable in these urban environments. HUMINT, the demise of which I feel has cost your country's intelligence services greatly, will help tracking them down. Heavy duty SF operations with overwhelming firepower (just in case anyone tried picking a fight) to capture people.
The CIA is not allowed to assassinate heads of govt. Fortunately, the enemy is not a nation with a govt, therefore perfectly legitimate targets. When you succeed, make it known. begin to make the enemy fear you, and your resolve.
It is difficult, I know. it exposes more troops to fire, which I know is not something which is popular. In a conventional conflict, your troops are the safest around. But in a non-conventional conflict they need to be out and about, not sitting in fortified bases, heavy tanks or APCs.
I think that this would have more of a chance of succeeding than dropping bombs on cities.
Other than that policy, I think the majority of your ideas make sense - implementing them may prove difficult, but I fell it would probably be for the best
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