Just what are you saying, my fiction is supposed to be a good and evil struggle between nations.
I hope your fiction is either a parody of the usual spy films or a satire on the current War on Terror. Otherwise I don't see the point of insisting in having either terrorists or a defined faction of bad guys, and having it in a CP victory world. Admitely, any action of the anti-terrorist Prussian commandos is going to be pure Kafka...
"Come on, boys!" - said Major Von Ketteler - "Our mission is to free this region of bloody terrorists... kill 20 civilians now in response to the last bombing".
If you ask me, I think your scenario would work better in a post-WW2 TL-191. There, the USA and Imperial Germany are superpowers and allies, Japan is the only power still strong to resist them (and depissed by both), and almost everybody is considered a terrorist by the German-American Alliance... Fascists, Confederates, several Nationalist groups, Communists, Mormons, Native Americans, Black Africans in the German colonies, Japanese and their allies/vassals in East Asia...