1996 Khobar Towers bombing
On June 25, 1996, a truck bomb, larger than any yet encountered, exploded next to the Khobar Towers, a U.S. Air Force Barracks in Dhahrain, Saudi Arabia. It killed 19 and wounded 372 persons. The area had been on alert since a November 1995 car bombing of the Office of the Program Manager, Saudi Arabia National Guard (OPM SANG) in Riyadh, killing 7. Khobar Towers, one kilometer from the King Abdul Aziz Air Base, which the U.S. used to conduct Operation Southern Watch, the no-fly operation over southern Iraq. The personnel in the barracks belonged to the 4404th Wing (Provisional) under BG Terry Schwalier.
Primarily responsibility was assigned to the Saudi branch of Hizbollah, 13 Saudi and one Lebanese member of which were indicted  by a U.S. grand jury in 2001.  The case has never gone to criminal trial, and the defendants are believed to be in Iraq. According to the 9/11 Commission, while Iranian clearly was involved, there are also signs that al Qaeda played some role, as yet unknown. U.S. intelligence monitored a call from Ayman al-Zawahiri to Osama bin Laden, two days afterward, praising him for the bombing.  In reporting U.S. government freezing of al-Qaeda related funds, one specific individual, Mamoun Darkazanli, also known as Abu Ilyaf, based in Hamburg and associated with the al-Qaeda Hamburg cell, was suspected of funding the attack on a Saudi training facility before the Khobar Towers attack, using his business, Mamoun Darkazanli Import-Export Company. 
In a civil lawsuit, Iran was found responsible in a U.S. court and ordered to repay the families, but it has not done so. 
The U.S. concluded that a number of lessons had been learned, at great cost, for both local warning and for physical protection against attacks.  After the 1995 attack, according to an investigation headed by MG (ret) Wayne Downing, "[t]here was no intelligence from any source which warned specifically of the nature, timing, and magnitude of the June 25, 1996 attack on Khobar Towers." Further, the public address system to invoke emergency management was inadequate.
A January 1996 Air Force vulnerability assessment was shared with the 4404th Wing. 36 of their recommendations were implemented immediately, with two more schedule. Nevertheless, Secretary Cohen agreed that Schwalier's action prevented a bomb from penetrating the compound, but did not adequately protect against a bomb detonated in a public parking lot outside the fence.
Secretary of Defense William Cohen, found fault in a number of areas, but principally acted by denying a promotion to major general for the 4404th Wing commander, BG Terry Schwalier. Schwalier's promotion was reinstated in 2008. 
Specific lessons learned, according to Cohen, were that the alarm and "take cover" procedures were inadequate, and drills had not been conducted that would have revealed these problems.
- US v. Al-Mughassil et al., U.S. District Court for the Eastern District of Virginia, June 2001
- Khobar Towers indictments returned, June 22, 2001
- National Commission on Terrorist Attacks Upon the United States of America, Chapter 2: The Foundation of the New Terrorism, 9-11 Commission Report
- Lawrence Wright (September 16, 2002), "Profiles: The Man Behind Bin Laden — How an Egyptian doctor became a master of terror", New Yorker
- Judith Miller (September 25, 2001), "A Nation Challenged, The Money Track; The 27 Whose Assets Will Be Frozen Are Just the First of Many, a U.S. Official Says", New York Times
- Carol D. Leonnig (December 23, 2006), "Iran Held Liable In Khobar Attack: Judge Orders $254 Million Payment", Washington Post
- William S. Cohen (July 31, 1998), Report: Personal Protection for Force Protection at Khobar Towers, U.S. Secretary of Defense
- Erik Holmes (Jan 16, 2008), "Khobar Towers general gets second star", Air Force Times