The prime minister called for business as usual
He said restoring stability to international relations was "vital" for jobs, living standards, trade and economic confidence as a whole.
In his keynote speech to the Confederation of British Industry annual conference, the prime minister conceded that the 11 September attacks on the United States had already affected the world economy.
At the same time he moved to head off potentially damaging media coverage surrounding a speech on Sunday by Chancellor Gordon Brown, in which he said the government was being "considered and cautious" towards the euro.
The prime minister told CBI members that policy towards the single currency had "not altered one iota".
War on terror
Although most of his speech concentrated on economic matters, Mr Blair began with a short section covering what he called "the present situation".
"The effect of the 11 September attacks on world economic confidence, not to say on airlines and tourist and other related industries, is there for all to see," Mr Blair said.
"We know that these people would commit further atrocities if they could, so winning the battle against international terrorism is to win for the economy too.
"Jobs, living standards, business and trade need us to defeat this terrorist menace."
Each step towards that goal, he went on, was "a step of reassurance about our own way of life and our ability to protect it".
"Restoring stability to international relations is vital therefore not just for foreign policy or national security but also for economic confidence and prosperity."
Mr Blair told his audience he was an optimist and that he was confident Britain was well placed to weather the economic rough weather ahead.
He also said his government would always put long term investment before short term tax cuts.
His comments came after the CBI's president Sir Iain Vallance warned ministers not to introduce higher taxes on business while eyes were focused on the campaign in Afghanistan.
The prime minister went on to issue a series of assurances to the gathering of business leaders.
Employment rights
There would be no "new ramp" of employment rights taking Britain back to the 1970s, he said.
The government would strive to keep taxes low - although if it came to a choice between taxes and spending, spending would come first.
And despite recent adverse publicity surrounding public private partnerships, he and his ministers were committed to maintain and, where possible, extend them.
The address comes the day after European leaders expressed their "absolute solidarity" with the anti-terrorism struggle during a London mini-summit hosted by Mr Blair.
More diplomacy
It opens another week of hectic diplomatic activity for the prime minister, who sets off for Washington by Concorde on Wednesday to hold talks with President Bush.
Back in Britain the following day, the prime minister will meet King Abdullah of Jordan before hosting Pakistani President General Pervez Musharraf at Downing Street.
On Friday Spanish Prime Minister Jose Maria Aznar, who was among those at Sunday night's mini-summit, will return to London for more talks with Mr Blair.
Hours before the prime minister's address the President of the CBI, Sir Iain Vallance, warned they would not "pull their punches" with the government while ministers were pre-occupied with the military campaign in Afghanistan.
He said industry's best response to the terrorist attacks on America was to get on with business.