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The 'Office of the Coordinator for Counterterrorism' coordinates all U.S. Government efforts to improve counterterrorism cooperation with foreign governments and participates in the development, coordination, and implementation of American counterterrorism policy. The office is currently (as of August 2005) headed by Ambassador at Large Henry A. Crumpton, the Coordinator for Counterterrorism.
The United States Counterterrorism Policy has four main aims:

★ to make no concessions to terrorists and strike no deals;

★ to bring terrorists to justice for their crimes;

★ to isolate and apply pressure on states that sponsor terrorism to force them to change their behavior; and

★ to bolster the counterterrorism capabilities of those countries that work with the U.S. and require assistance.
Regarding international terrorism, the U.S. Government will make no concessions to individuals or groups holding official or private U.S. citizens hostage. The United States will use every appropriate resource to gain the safe return of American citizens held hostage. At the same time, it is U.S. Government policy to deny hostage takers the benefits of ransom, prisoner releases, policy changes, or other acts of concession.
'HISTORY'
In reaction to the State Department's 2004 proposal to omit terrorism figures from its Report to Congress, TERRORISM: WHY THE NUMBERS MATTER, By Larry C Johnson, Managing Director, BERG Associates, LLC [1]
Johnson reviews the history of the Counterterrorism functions at the State Department and establishes it as a reaction by the Reagan Administration putting L. Paul Bremer as the first operational Director.
Johnson wrote, "I believe that part of the reason the statistics became an issue again this
year is because of the failure to keep the position of the Coordinator for
Counter Terrorism filled with a competent Presidential appointee. That
slot has been vacant now for almost six months.
While the conventional wisdom is that State Department’s role in combating terrorism consists
of sending stern diplomatic notes to terrorists, it is an unfair and
inaccurate perception. State Department’s role as the lead for
coordinating international terrorism emerged in the mid-1980s in the
wake of devastating attacks in Lebanon.
A National Security Decision Directive signed by President Reagan in early 1986 gave State the
responsibility of coordinating international terrorism policy. This was in
response to an interagency fight that broke out during an effort to
apprehend the terrorists responsible for the hijacking of the Achille
Lauro cruise ship. While flying over Italy in late 1985 in pursuit of Abu
Abbas, a State Department official and a CIA officer argued heatedly
over who was in charge of the mission.
Recognizing the need for a clear chain of command the Department of State was put in charge of
coordinating the efforts of CIA, DOD, and FBI efforts to track and deal
with terrorism. The first man put in charge of this effort was L. Paul
(Jerry) Bremer. "