Please forgive my ignorance,but is alchohol truly forbidden in Islam?

I read in a book about Omar Khayyam (admittedly a fictionalized account of the great poet's life) that the (Great Prophet) Mohammed originally banned alchohol because he was trying to unite a bunch of hill tribes to defend themselves (against the depredations of the Crusaders) that cordially detested each other and would have gladly macred their nieghbours given enough opportunity.Is there any truth to this? Also,could you please translate 'alchohol' was it 'Al Kuhul'(that which maddens')?Thank you.