IN DIGITAL COMBAT, U.S. FINDS NO EASY DETERRENT This article was reported by John Markoff, David E. Sanger and Thom Shanker, and written by Sanger. WASHINGTON -- Earlier this month, top Pentagon leaders gathered to simulate how they would respond to a sophisticated cyberattack aimed at paralyzing the nation's power grids, its communications systems or its financial networks. The results were dispiriting. The enemy had all the advantages: stealth, anonymity and unpredictability. No one could pinpoint the country from which the attack came, so there was no effective way to deter further damage by threatening retaliation. What's more, the military commanders noted that they even lacked the legal authority to respond -- especially because it was never clear if the attack was an act of vandalism, an attempt at commercial theft or a state-sponsored effort to cripple the United States, perhaps as a prelude to a conventional war. What some participants in the simulation knew -- and others did not -- was that a version of their nightmare had just played out in real life, not at the Pentagon where they were meeting, but in the far less formal war rooms at Google Inc. Computers at Google and more than 30 other companies had been penetrated, and Google's software engineers quickly tracked, the source of the attack to seven servers in Taiwan, with footprints back to the Chinese mainland. After that, the trail disappeared into a cloud of angry Chinese government denials, and then an ugly exchange of accusations between Washington and Beijing. These recent events demonstrate how quickly the nation's escalating cyberbattles have outpaced the rush to find a deterrent, something equivalent to the cold-war-era strategy of threatening nuclear retaliation. So far, despite millions of dollars spent on studies, that quest has failed. Because the Internet has blurred the line between military and civilian targets, an adversary can cripple a country -- say, freeze its credit markets -- without ever taking aim at a government installation or a military network, meaning that the Defense Department's advanced capabilities may not be brought to bear short of a presidential order. Google has said it will stop censoring searches conducted by Chinese, even if that means being thrown out of China. Google's executives are essentially betting that Beijing will back down, lift censorship of searches and crack down on the torrent of cyberattacks that pour out of China every day. An Obama administration official who has been dealing with the Chinese mused recently: 'You could argue that Google came up with a potential deterrent for the Chinese before we did.' 