Rather like Christos Tsiolkas's The Slap, Amy Waldman's The Submission (longlisted for this year's Guardian first book award) is a novel motored by a single incident whose consequences fan outwards and end up engulfing an entire community. It's two years since 9/11, and a jury of Manhattan bigwigs has been given the task of selecting a memorial for the site of the atrocity. After considering several hundred anonymous submissions, the jury settles on a design for a rectangular walled garden whose contemplative aura is thought likely to appeal to the relatives of 9/11 victims. But then an unforeseen problem emerges: the name of the designer is revealed as Mohammad Khan.

Unsurprisingly, when it reaches the public that a Muslim (albeit an American one) has been selected (albeit inadvertently) to design the memorial, a furious backlash ensues, with rightwing shock jocks talking of a "Jihadi Paradise in our back yard". The affair escalates into a national crisis in which two versions of America  one liberal, tolerant and fair-minded, the other bigoted, hotheaded and vengeful  are pitted against one another.

The narrative takes in a disparate cast of characters, ranging from New York's arrogant upper crust (the sour ex-banker who chairs the jury; the elegant rich widow who sits with him on it as the sole representative of "the families") to less entitled figures also bereaved by the atrocity (the brother of a fireman who entered one of the towers just before it collapsed; the illegal immigrant widow of a Bangladeshi office cleaner). There's a tabloid hack on the make, whose modus operandi is so unpleasant as to arouse suspicion of some kind of professional point-scoring on the author's part. (Waldman used to work at the New York Times.) There's the leader of an anti-Islamic pressure group who poses on her website in a see-through burka and bikini.

And then there's "Mo" Khan himself, an ambitious, handsome architect of Indian origin whose reasons for submitting his design remain intriguingly opaque. While his wish to memorialise the tragedy seems genuine, one suspects that a thirst for career-advancing publicity, as well as an obscure desire to provoke, were even bigger motivating factors.

Although none of the characterisations are especially deep (back stories tend to get sketched in a few quick paragraphs), this doesn't prove too big a drawback because The Submission isn't primarily a character-driven novel. It's really a work of social realism whose objective is to show something about the workings of an entire society, how its disparate parts fit together. In this, it brought to my mind recent TV series such as The Wire and The Killing, with their focus on the interplay of public and private and the slow erosion of civic ideals. In The Submission, too, we get to see power murkily wending its way between the interrelated spheres of politics, finance and media; we get shown the process by which private emotions such as grief become politicised; and we learn how the system cruelly conspires to dupe those on the margins.

In attempting all this, Waldman has two significant things going for her: she knows her stuff, and she writes well. The Submission gives the impression of being underpinned by a deep knowledge of municipal politics, of committees and pressure groups, and its best scenes are those that inhabit this quasi-official sphere. There's a brilliant account of the journey made by the memorial jury's chair, Paul Rubin, from master of the universe to stumbling buffoon as he ineffectually attempts to manipulate the fallout from the crisis. The rambling discussions of the Muslim American Coordinating Council (which Mo reluctantly allows to take up his cause) are entertainingly depicted, and there's a moving set-piece hearing at which relatives of 9/11 victims are given the opportunity to publicly express their feelings about the memorial.

Meanwhile, Waldman's smooth, knowing prose serves to ensure that the regular shifts of register never jar too much. She is especially good at one-line descriptions that neatly sum up a character or situation: Paul Rubin's wastrel son pushes "unrealized potential before him like a baby carriage"; the tabloid hack, alone at night in her office, eats ramen noodles from a vending machine, "their texture just a few molecular recombinations from the Styrofoam cup containing them".

Ultimately, The Submission's opening narrative ploy, though a brilliant device for getting the story up and running, proves something of a limitation. There's a growing sense that too much in the novel is determined by it, that the characters don't truly exist outside its frame. As a result, The Submission seems to lose, rather than gain, moral depth and momentum as it progresses. Still, this is an exciting debut from a writer who has set herself the target of attempting something urgent and bold, and who has, for the most part, pulled it off. Published a decade after 9/11, it reveals much about the frenzied, divisive political climate produced by that catastrophe, which is still very much in evidence today.

Perhaps the representatives of fiction writing and non-fiction writing in America didn't gather in a smoke-filled room at the end of 2001 and divide territory. Perhaps the fiction writers didn't claim for themselves the individual tales of trauma around the day itself (signatories include Jonathan Safron Foer, Don DeLillo, Claire Messud) while the non-fiction writers held on to History and Politics leading up to and on from 9/11 (Lawrence Wright, Jane Meyer, Rajiv Chandrasekaran). If it did happen, then Amy Waldman  former bureau chief for the New York Times  simply decided to tear up the contract.

While there is no shortage of American writers who bemoan all that has been done to their nation, by their nation, in the name of 9/11, there has been, until now, a dearth of American novels exploring that particular trajectory (there is a dearth of American novelists exploring what has been done to other nations by their nation, too, but that's another matter). There are, of course, various ideas about why this is so. One of them is this: how do you take the trauma and grief of 9/11 as the starting point of a novel and move on to a tale of suspended civil liberties and prejudice without the former entirely overshadowing the latter? Waldman takes hold of this potential stumbling block and turns it into the bedrock of her novel. The grief surrounding 9/11  the forms it takes, the claims it makes, the claims made in its name by third parties, the hierarchy which surrounds it (not all griefs are equal), the guilt and anger which are born from it, the gulf between the silence of private grief and the clamour of public grief  is central to this exceptional debut about a changing America.

The novel starts in New York in 2003 during a tense jury meeting. The judges must decide which anonymously submitted design will become the September 11 memorial, built on the site of the World Trade Center. Backing a design known as "The Void" is the influential artist Ariana Montagu; in favour of "The Garden" is the beautiful widow Claire Burwell, who represents the families of those who died on September 11. Only when a decision is reached does the chair of the jury open the envelope containing the name of the architect.

The astute reader might not be surprised, having read the novel's title, at discovering the name of the architect. The word "Muslim", after all, means "one who submits". The jury lurches into chaos: what should be done? What are the consequences  to the nation, to the jury, to the memorial  of choosing a Muslim architect to commemorate 9/11? Isn't it important to at least find out what kind of Muslim he is before announcing the winner? Claire Burwell is steadfast in her support of the design  her late husband, killed in the attacks, would have been appalled at the idea of such discrimination. Before the chair of the jury can decide how to proceed, someone (who?) leaks the story to a tabloid newspaper.

Enter the architect Mohammad Khan, wholly secular, ferociously ambitious. An American-born-and-bred child of migrants, he can't begin to understand why his father starts going to the mosque after 9/11. This isn't to say he's unaware of what it means to be identified as an American Muslim after the attacks  following a trip to Afghanistan, where he submits a design to build the new American embassy in Kabul, he grows a beard to test the responses of his fellow citizens.

The uproar that surrounds the newspaper reports that the winning architect is Muslim is only exacerbated when the design becomes public. "A Lovely Garden  and an Islamic One?" reads the Times's headline the following day; the question in the headline is quickly taken up as fact by a group called Save America from Islam, which declares that Khan has designed "an Islamic garden, this martyr's paradise  a code to jihadis". Asked to answer questions about influences and intentions, Khan refuses. If he weren't Muslim, he says, no one would ask the question. Claire Burwell, his greatest champion, is not the only one to be bewildered by his refusal.

How are we to read Mohammad Khan? Is he standing up for his rights, or merely assuming an arrogant position that places him outside history? Should he step off his high horse and try to understand the confusion of those who lost loved ones in the attack and have been surrounded for two years with rhetoric which equates the attacks with Islam itself? Should he see the questions as opportunities to build a bridge, or is he right to believe that once you start apologising for the actions of terrorists you implicitly accept that they represent all Muslims? Is he naive, or brave, or does he have something to hide?

These questions are given texture and complexity by the characters who surround Khan and Burwell, all with their competing griefs and/or agendas. There's Asma Anwar, the Bangladeshi woman whose husband was killed in the attacks, yet who doesn't quite belong in the official pantheon of Grieving Family Members because she is, as her husband was, an illegal alien. There's Sean Gallagher, unofficial leader of the Angry Family Members, whose brother was killed in the attacks and who finds himself allied with Save America from Islam, which is not wholly to his liking; Alyssa Spier, the newspaper columnist who ignites and feeds the fire around the winning design; Laila Fathi, the Iranian-American lawyer with whom Khan begins an affair; Lou Sarge, the rightwing radio "shockjock"; the Muslim American Coordinating Council, which agrees by a 12-8 vote to support Khan, but only on its own terms; the governor with an eye on re-election; the chair of the jury with a reputation to maintain.

The characters surrounding Khan whose agendas don't issue from genuine grief are easy enough to reach judgments about. But the novel centres on Khan and the three family members  Asma Anwar, Sean Gallagher and Claire Burwell. Through their stories and interactions Waldman builds a tale of complexity and tension. A gunshot always seems a more likely outcome than a group hug, but it is equally possible that the violent outcome won't involve bloodshed but the death of already-damaged ideals.

Waldman's prose is almost always pitch-perfect, whether describing a Bangladeshi woman's relationship with her landlady or the political manoeuvring within a jury. The characters are wholly realised and believable as individuals, but they also stand in for stories and conflicts that go beyond their own lives. Particularly adept is the mirroring of Khan's growing self-righteousness with Burwell's crumbling liberal attitudes. If either of them had been less flawed both would have come out of it better. There is, of course, a lesson there  but it never feels like a lesson.

The Submission would have been a remarkable response to last year's Cordoba House/Park 51 debacle in America, with its Qur'an burnings, its editorials about the difference between what is legal and what is acceptable, its reminder that not all post-9/11 conflicts were taking place outside America. In fact the novel was conceived  and its first draft written  before the explosive arguments around the proposals for a Muslim cultural centre near Ground Zero. Those oft-repeated claims about the novelist's need to take "the long view" and wait years after an event to write convincingly about it overlook the fact that novels can also anticipate what is yet to come  even if "what is yet to come" overtakes the publication of the novel. (It's worth mentioning here Mohsin Hamid's The Reluctant Fundamentalist, the first draft of which was finished before 9/11.)

The final section of the novel takes place 20 years after the main events, and more than a decade into our future. Waldman's imagined America of the future has "self-corrected" away from its mood of paranoia, the suspicion between its Muslim and non-Muslim citizens a thing of the past. From another writer this might sound like unwarranted optimism, but Waldman has been so sure-footed until now that it would be churlish not to hope that she is right about this, too.

Kamila Shamsie's Burnt Shadows is published by Bloomsbury.