Why do you think terrorists use (algorithmic) encryption in common communication channels at all? There are so many ways to transport a hidden message in plain sight that using encryption itself might give intelligence a hint that terrorists would avoid. Embed the crucial information in videos, photos or a text about your mothers cheese macaroni recipe. Or use a side channel for communication, not mail or some messenger.

The idea of finding clever criminals by decryption their communications is stupid by itself. And stupid criminals leave so many trails bragging about their plans that you don't need decryption and back doors. Most european terrorist attacks were done by criminals already known by intelligence, but not monitored strongly (see Berlin). Monitoring all communications would lead to an explosition of the number of suspects. It would not lead to more security.

I don't think monitoring communications is that effective at stopping terrorist attacks.

For every terrorist there are tens of thousands of people who say something hateful or advocate violence. There are no resources to track them all down. Also note that many kinds of attacks require very little coordination.

I think the key is to use the intelligence you have effectively. I think of how the Boston Bomber spent 6 months in Chechnya and the Russians gave us a heads up about that and I think he deserved a little investigation since hardly anybody every goes there and Chechnya is famous for having the world's best terrorist training camps.

I'm a lot more worried about digital terrorism than analogue. Analogue terrorist attacks have limited scale and impact, but a digital terrorist attack can have a country wide or even global impact. Secure and encrypted communications are just as important to thwart digital terrorism as they are to preserve an individuals privacy, security and rights.

I imagine you'd do it in exactly the same way as when things aren't encrypted - with good quality investigation, surveillance and informants.