Remember what Osama said? And if a mosque is built near ground zero, I just can’t see Muslims as seeing this powerful symbol as a defeat of Islam. I see quite the contrary. This can only be a major setback for the U.S. and indeed, the entire western civilization.
Islam will be seen by many as being the much stronger horse. Many Muslims see the U.S. invasions of Iraq and Afghanistan as having been defeated, simply by the U.S. leaving. On top of this, building the mosque near the site of the attack that sparked the invasions can easily be interpreted as a victory for the "Nation of Islam". After all, in a nationalistic view of Islam, the mosque will be an embassy. And built upon or near the site of Islam’s greatest modern victory? A monument, celebrating Islamic supremacy. I can see how many ‘moderate’ Muslims world-wide will interpret Islam as being the ‘stronger horse’.