Our Ally, Our Problem: Pakistan is an exceptionally hard case -- here's what to do.

As the Bush administration moves into the next phases of the war against terrorism, it will need to confront a profoundly difficult problem: Pakistan is at the same time an indispensable partner in that war and a principal and continuing source of the terrorist threat. The al-Qaeda network, created in Pakistan in 1989, was nurtured by Islamists in the Inter-Services Intelligence agency (ISI) and the military. Ultimate victory in the current conflict will require a concerted strategy to purge the Pakistani government of the elements that facilitated the rise of al-Qaeda.

The genesis of Pakistan's role in the jihadist terror network was President Zia ul-Haq's shift toward Islamist ideology in the 1980s. Interpreted in the West merely as an attempt to legitimize his military rule, Zia's adoption of Islamist views was in fact part of a wider political and geostrategic vision: He sought to use radical Islam to conquer Afghanistan through proxy forces and to create an alliance with states such as Iran and Saudi Arabia. The objective was to create an Islamist coalition -- one that combined Pakistani nuclear weapons and the oil wealth of the Persian Gulf -- that would serve as a "dagger" aimed at India and that would expand its influence into Central Asia.

By the early 1980s, the ISI was busily executing Zia's vision. U.S. aid to the Afghan resistance was channeled overwhelmingly to fundamentalist groups within that movement. A partnership was struck between the ISI and Saudi Arabia's intelligence service to fund a program to bring jihadists to Pakistan from throughout the Islamic world, to be trained in paramilitary tactics and to participate in the war in Afghanistan. Osama bin Laden took up residence in Peshawar in 1984 to run the so- called Services Office that facilitated the involvement of foreign fighters; it was this office that eventually morphed into al-Qaeda. At the same time, Saudi money supported the creation of thousands of madrassas (religious schools) in Pakistan, whose best graduates were to be recruited into the jihadist movement.

In the mid 1990s, these efforts culminated in the ISI's forging the alliance between al-Qaeda and the Taliban regime, itself a client-state of Pakistan. The ISI arranged the initial meetings between bin Laden and Mullah Omar, brokered their partnership, and facilitated the fusion of their military and paramilitary organizations. The ISI benefited from the arrangement by training Kashmiri guerrillas in the al-Qaeda camps in Afghanistan.

While President Pervez Musharraf replaced the leaders of the ISI after September 11, evidence suggests that the Islamist elements associated with the agency are not reconciled to defeat. Hamid Gul, the former head of the ISI who is said to retain influence over the true believers in the agency, has vocally opposed Musharraf's cooperation with the United States. Al-Qaeda operatives and leaders -- including the recently arrested Abu Zubaida and perhaps even bin Laden -- have been hiding in safe houses in Pakistan, many of which were established under the auspices of the ISI.

The threat in Pakistan stems not from popular support for the Islamist cause -- radical parties typically receive 5 percent of the vote in national elections -- but from Islamist influence in the military and intelligence services. Therefore, the U.S. response should focus on finding points of leverage to purge this influence and on returning Pakistan to the moderate and secular path from which it departed under Zia.

Musharraf is a vital -- but profoundly flawed -- vehicle for such a strategy. He was the leader of Pakistan's reckless military adventure at Kargil in 1999 and was involved in Islamist charities that funneled support to al-Qaeda. At the beginning of the current war, he only reluctantly supported the United States, describing his decision as the lesser of two evils. Yet as a result of this choice, he has crossed the Rubicon. The Islamists in his government and society view him as a traitor; he cannot go back. This means that the United States is in an ideal position to enforce its demands on him.

To date, the Bush administration's strategy vis-a-vis Pakistan has fluctuated between living in denial about Islamabad's role in terrorism and playing hardball by levying non-negotiable demands on its leader. What is needed is a rollback strategy -- one that offers help to address the internal and external pressures on Musharraf's government at the price of cleaning out the Islamist influences in key institutions.

First, the United States should do what is necessary to destroy the dream of a rising Islamist coalition that has animated Pakistani radicals since Zia. While the destruction of the Taliban regime was a vital first step, the United States should work to ensure that a moderate, pro-Western regime takes power and succeeds in Afghanistan. The United States should also use its influence with such a government to promote friendly relations with Pakistan and ease Islamabad's fear of a two-front threat from India and Afghanistan.

The last hope of Islamist opponents of Musharraf is to stage a comeback in Afghanistan through a Pashtun nationalist backlash against the Tajik-dominated interim government created under U.S. power. The danger is real if the Bush administration fails to adjust its policies. Yet if the United States uses the current Afghan tribal assembly to redistribute control over the power ministries -- and particularly if it creates a nonpolitical and professional military -- the likelihood of a Taliban comeback will be substantially undercut.

At the same time, the United States should use the current crisis between Islamabad and New Delhi to destroy the prospects that Pakistan can make gains in Kashmir by employing Islamist paramilitary groups. In recent weeks, President Bush has rightly insisted that Musharraf live up to his pledges of last December to shut down the ISI-created Kashmiri insurgent organizations operating in Pakistan. Musharraf's backsliding on those commitments -- for example, by arresting and then releasing the radical Islamists behind these movements or by recreating them under new names -- led to the current crisis.

Because Pakistan cannot win a war with India, Musharraf is in a box. The United States should intervene diplomatically to ease his predicament, but exact a price for its help. Furthermore, the Bush administration should also make clear that the U.S. will address Islamabad's interest in resolving the Kashmir question in the future only if the Islamist insurgencies are permanently curtailed. By these actions, the United States can demonstrate that Zia's Islamist vision for achieving greatness for Pakistan is a dead end.

Second, the United States should engage Musharraf in an effort to purge Pakistan's military and intelligence services of dangerous influences. Below the senior leadership, the ISI remains a hornet's nest of radical Islamists. This state within a state has close ties with retired ISI personnel -- particularly those around Hamid Gul -- and Islamist political parties. They appear to be trying to foment general insecurity in order to reduce the Western presence that serves to support Musharraf's government. The recent attacks on churches, the murder of Daniel Pearl, and the fatal bombing of French engineers may stem from this strategy. Their hope is that, once isolated, Musharraf will be more easily toppled through a combination of street protests and an internal coup.

Third, the Bush administration should be far more generous in offering to help rebuild Pakistan's secular school system. The thousands of madrassas in Pakistan funded by Saudi Arabia create a breeding ground for Islamist opposition to Musharraf and recruits for the international jihadist movement. The initial $36.5 million U.S. aid program is just a down payment on what is needed.

Fourth, the United States needs to look for ways to restore civilian and constitutional rule in Pakistan without destabilizing the country. Though Pakistan has always been a difficult partner even under civilian governments, the natural allies for the United States are its secular political parties, not the generals with imperial aspirations. The process of transition should be structured so that Musharraf has the burden of dismantling the Islamist presence in the Pakistani government, ending ISI interference in domestic politics, and creating the mechanisms for genuine civilian control over national-security policy. Only then will a shift to civilian rule involve a genuine transfer of power.

A strategy for rollback of Islamist power in Pakistan is as important as the defeat of the Taliban regime. The Taliban and al-Qaeda -- both created in Pakistan with the assistance of the ISI -- were manifestations of a radical political project that has not yet been fully defeated. Stability in the region -- and victory in the war against terrorism -- can only come once the imperial dream of Zia ul- Haq has finally died.