The United States use of Unmanned Combat Aerial Vehicles (UCAV) or drones for targeted killings of terrorists has been on the rise in recent years and the method has become the core element of president Obamas strategy in the war against terror. This study examines the deterrent effect of targeted killings on terrorism using UCAV/drones as a method of counterterrorism. Building on the literature on counterterrorism, UCAV, targeted killings, deterrence theory and statistics on terrorism the study provides a case study of the CIA drone operations in Pakistan between the years 2004-2010. The goal has been to analyze drone operations and the extent of terrorism from the beginning of the drone campaign until 2010. This as a means of identifying possible trends in terrorism activity due to the occurrence of drone strikes. Findings suggest that the possibility of a deterrent effect is far from evident and that there are some indications of increased terrorism.