What had been dubbed "Operation Infinite Justice" is now to be known by the less controversial name "Operation Enduring Freedom".
The new name was unveiled by Defence Secretary Donald Rumsfeld at Tuesday's Pentagon briefing.
He said the administration had quickly reconsidered the original name because, in the Islamic faith, such finality is considered something provided only by God.
Mr Rumsfeld stressed that "Enduring Freedom" was the codename for the military build-up, not the overall US assault on international terrorism, which will use economic, political and diplomatic means.
The campaign would be long, difficult and dangerous and "the likelihood is that more people may be lost," Mr Rumsfeld said.
The new name suggested that "this is not a quick fix... It'll take years, I suspect," he added.
Crusader Bush
US President George W Bush has already run into trouble for using terminology which offended sensibilities in the Muslim world.
Support from Arab and Islamic countries will be a vital component of the international anti-terrorism coalition which Mr Bush is hoping to build.
In unscripted remarks to journalists on the White House lawn last week, Mr Bush said: "This crusade, this war on terrorism, is going to take a while."
Mr Bush, with his reputation for uncertainty about matters beyond America's shores, may have had little idea of the religious intolerance and brutality towards Islam that the word conjures up among Muslims.
The White House said it regretted if President Bush had offended anyone.
But at Friday prayers in Beirut last week, Sheikh Afif al-Naboulsi, the head of south Lebanon's religious scholars, said that the US anti-terrorism campaign should have been named "Operation Infinite Injustice" - because, he contended, it was intended to establish control of oil-rich former Soviet Muslim republics in Central Asia.
A hardline newspaper in Iran suggested "Infinite Imperialism" might have been more appropriate.