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A couple admire a street-art mural, created following the terror attack at the Manchester Arena, in Manchester on Thursday. The work features bees, a symbol of the city’s industrial heritage. Britain Thursday closed in on a jihadist network thought to be behind the May 22, 2017 Ariana Grande concert attack, as grief mixed with anger at the US over leaked material from the probe. Britain has raised its terror alert to the maximum level and ordered troops to protect strategic sites after 22 people were killed in a suicide bomb attack on a Manchester pop concert.AFP / Getty Images

Paul Dennett struggled to hold back tears as he laid a bouquet of flowers at a makeshift memorial on St. Ann's Square in downtown Manchester.

Mr. Dennett is the mayor of suburban Salford and a member of the Greater Manchester regional government. He normally spends his days working on issues such as housing and urban planning, but everything changed Monday night.

His partner had taken his two teenaged daughters and one of their friends to the Ariana Grande concert at Manchester Arena. They were just leaving the building when a bomb tore apart the arena's foyer and sent shrapnel ripping through the crowd. Mr. Dennett's partner and his daughters managed to get home safely, but their friend did not. She was among the 22 who died.

"It's very real for me," Mr. Dennett said. "To be honest with you, words fail you at times, and this is one of those times when words genuinely do fail you. I can't really convey in words how I feel and how I feel for the families of the victims and the people who have been caught up in this horrific incident." Then he paused and added: "It's been an awful week."

There's been a lot of soul-searching in Manchester this week as the city recovers from the worst terrorist attack to hit Britain in 12 years. This was supposed to be a tolerant community, a place that had rebounded stronger than ever from its last major tragedy – a bombing by the Irish Republican Army in 1996 that destroyed a large part of the downtown. Or at least that's what many people thought. Now, as the reality of Monday's suicide bombing sinks in, there are real questions about just how united this city of three million people really is and whether it will ever fully recover.

"I think a lot of people are perhaps feeling frightened," said Anna Fryer, who lives in the neighbourhood next to where the bomber, Salman Abedi, grew up. For her there's real pain that Mr. Abedi was born here, went to school here and worshipped at a local mosque that many have held up as a beacon of openness. How he could turn on everyone around him is just gut-wrenching for her. She's been trying to explain to her seven-year-old daughter what happened and that she still loves the city, but something has changed. "It's been a really awful time," she said. "To hear that the attacker came from here, it's just hard to understand."

Mancunians love to talk about the city's resilience and ability to overcome odds. After all, this is where the industrial revolution took off and where industrialists crafted wondrous machines that put Britain at the forefront of technology. And when the smokestack industries faded, the city reinvented itself, transforming the factories into offices and becoming the second-largest financial centre in Britain.

People are quick to point out that this isn't glitzy London, with its intellectuals, upper classes and bureaucrats. Manchester's blue-collar roots run so deep that the city's official symbol is a worker bee.

But that drive toward success has left many behind and Manchester faces some of the worst inequality of any city in the country. While the central core is booming and set to expand even further under a new regional-development plan called the Northern Powerhouse, sections of the Greater Manchester area are struggling with far higher unemployment, lower wages and growing disgruntlement.

More worrying for many is the rise of terrorism-related activity in some of the hardest-hit neighbourhoods. By some accounts, at least 16 men from parts of south Manchester have either joined the Islamic State in the Middle East or been convicted of terrorism offences in Britain. "With the exception of London and Birmingham, Manchester has produced more individuals convicted of Islamist-related terror offences than any other part of the United Kingdom," said a report by the Henry Jackson Society, a London-based think tank that studies extremism.

Just how Mr. Abedi fit into that group remains to be seen, but police seem convinced that he did not act alone. There are reports he had ties to some of the city's most extreme radicals and that he acted out of revenge for the deaths of Muslims in Syria. So far police have raided 12 locations across the city, suggesting a network far larger than many expected. They have also arrested nine people, including Mr. Abedi's older brother.

The investigation has also focused attention on the city's Libyan community, the largest in Britain, and its connections to jihadist groups. Mr. Abedi's parents fled Libya in the 1990s and came to Britain as refugees. The family returned to that country six years ago and took up the fight against Libya's leader, Moammar Gadhafi. Mr. Abedi, his mother and older brother returned to Britain around 2014, but he made several trips back to Libya, where reports say he became increasingly radicalized. There are also reports that Mr. Abedi travelled to Libya just before the bombing and that his father and younger brother are now being held by Libyan militia.

"He did what he did in revenge, and in love for Islam," his sister Jamona Abedi told The Wall Street Journal from the family home in Tripoli.

For many of those who worshipped with Mr. Abedi and his family at the Manchester Islamic Centre, there's anger and disbelief at the bombing. "Such people should be given exemplary punishment, and their backers should be hanged so that nobody dares to spoil the peace of our country," said Iftakhar Awan as he stood outside the mosque the day after the bombing. He'd never met Mr. Abedi and insisted that the mosque would have reported anything suspicious to the police. And he said he can't understand why someone so radicalized wasn't caught sooner.

That's a question local activist Furqan Naeem wants answered. He said the bombing will force the Muslim community to take a hard look at itself. "We've got to ask serious questions about why this was allowed to happen," said Mr. Naeem, who works with Citizens UK, an organization that promotes social justice. "The Muslim community has got to understand that the authorities – the security services, the police – ultimately they are here to look after us, they are here to make sure that we live peacefully and we need to understand that and build that trust with them."

Others fear an ugly backlash is already building and that Manchester's reputation as a tolerant city is about to be tested. "There's going to be an anti-Muslim feeling," said Alan Forth, 74, as he laid flowers in St. Ann's Square this week. "When you see people saying we're coming together, it's not true. There are people that usually turn up at these [vigils for victims]. I turn up. But lots of people don't turn up and they are very, very angry." Police too are worried. On Friday, Manchester's Chief Constable Ian Hopkins said the number of reported hate crimes had jumped to 56 on Wednesday from an average of 28 a day before the attack.

But businessman Carl Austin-Behan held out more hope. He pointed to the aftermath of the 1996 bombing as proof that the city can pull together. "The city was devastated, but that made us stronger – and look at where we are now," said Mr. Austin-Behan, who runs a cleaning company and came to the square Thursday with hundreds of other people for a minute of silence in memory of those who died. "We won't be beaten. We won't let anything like this stop us."

That was the message Mayor Dennett tried to keep in mind as he left the square after laying his flowers and pausing for a moment of reflection. "This is the birthplace of the working class. Solidarity is in our blood, it's in our veins," he said. "We know fundamentally what that means and we will continue to do what we know best, which is pull together."

While the investigation into the concert attack continues, residents of Manchester turn out to honour the victims

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