U.S. sharpens focus on South Asia's Gordian Knot

By Simon Cameron-Moore - Analysis

ISLAMABAD (Reuters) - The outgoing Bush administration was always going to leave President-elect Barack Obama with the problem of what to do about Pakistan, America's conflicted ally in the war on terrorism.

That problem got bigger when Islamist militants, allegedly from Pakistan, butchered 171 people in an assault on the Indian city of Mumbai last week, providing a potential trigger for conflict between South Asia's nuclear-armed rivals.

Pakistani security officials have warned that all their forces will be switched to the eastern border with India, leaving al Qaeda and the Taliban free to roam on the Afghan border if a confrontation develops.

Indian analysts, however, say a military face-off is unlikely, given the high costs involved in such an action.

U.S. Secretary of State Condoleezza Rice arrived in New Delhi on Wednesday as Chairman of the Joint Chiefs of Staff Admiral Mike Mullen flew into Islamabad on a mission to calm tempers.

"The U.S. mediation effort shows that this might just spin out of control unless watched very carefully," Samina Ahmed, the Islamabad-based South Asia project director for International Crisis Group, said.

"I think Obama has been taken into confidence. Rice has had several conversations with him. It is a difficult one for the new administration."

Managing Pakistan is a foreign policy priority for the United States, with 32,000 U.S. troops in Afghanistan and plans for more, and al Qaeda leaders plotting their global jihad in Pakistani tribal lands on the Afghan border.

Obama knows that part of reason for the U.S. failure to stabilize Afghanistan is because the Bush administration never fully got Pakistan's support, for all its help in eliminating hundreds of al Qaeda members.

REGIONAL JIG-SAW

Obama has also hinted that he thinks a settlement between India and Pakistan over Kashmir is part of the equation.

"Peace in this region will pay dividends, will pay dividends for peace in Afghanistan and peace globally, the stakes are very high," said Ahmed.

Pakistan's support is needed to defeat al Qaeda, and for military success against the Afghan insurgency and any political settlement between the government in Kabul and Taliban leaders.

Afghan President Hamid Karzai has often said the Taliban leadership was based in Quetta, the capital of Pakistan's western province of Baluchistan, and U.S. commanders have said the insurgents' command and control centers were in Pakistan.

Washington's greatest leverage over a hard-up Islamabad is money. Only International Monetary Fund support last month has saved it from a balance of payments crisis.