In Afghanistan, Karzai, barely in control of his own capital, pushed ahead with a Saudi peace initiative by offering to talk turkey with archenemy Mullah Mohammad Omar, the reclusive, one-eyed Taliban leader who has been in hiding since the United States invaded Oct. 7, 2001, and toppled his regime. There is a $10 million U.S. bounty on his head. Karzai pledged he would resist demands from the international community to hand over Mullah Omar to U.S. authorities.

Defiant, the Afghan president said he would go to any length to protect Omar, and NATO forces in Afghanistan would be left with two choices: "Remove me or leave." Despite a string of denials, Saudi King Abdullah's dinner in Mecca Sept. 27 with both Taliban and Karzai government envoys was the first step on a protracted negotiation with a view to forming a coalition government.

Meanwhile, Karzai is setting up a new organization to identity Taliban fighters who might want to switch sides and accept to be retrained for a civilian job. And this at a time when the Taliban's Islamist guerrillas have stepped up operations throughout Afghanistan, a country the size of France, and are slowly encircling the capital, Kabul. Some 70,000 allied troops are spread around some of the world's most inhospitable terrain, but only 10 percent of the non-U.S. troops are allowed to engage in combat, hamstrung by scores of caveats imposed by their national parliaments.

It didn't take long for the new CENTCOM commander, Gen. David Petraeus, to conclude there is no military solution comparable to his brilliantly successful "surge" in Iraq. Like in Vietnam in the 1970s, negotiations with the enemy are not only inevitable but necessary. Europe's NATO allies and Canada would welcome a negotiated end to the conflict. Their parliaments have made clear they expect all of their troops out by 2011.

The discouraged Europeans, like the United States, have only one irreducible demand: an irrevocable Taliban break with Osama bin Laden's al-Qaida. Prior to Sept. 11, 2001, al-Qaida kept some 20 bases throughout Afghanistan where jihadist volunteers from former Soviet Muslim republics in Central Asia, the Middle East, North Africa, Britain and the rest of Europe trained in conducting acts of terrorism.

Mullah Omar, who is believed to be operating out of a secret headquarters in or near Quetta, the capital of Pakistan's Baluchistan province, which Taliban fighters based in Pakistan's tribal areas use for clandestine R&R, is not about to give Karzai a favorable response to his invitation to talk. In fact, his response was that the evacuation of all foreign troops would have to come first. But the buzz on talks about talks may encourage Taliban dissidents and hopefully provoke a schism among the leaders.

Across the Hindu Kush mountain range, the new civilian government in Pakistan, backed by a now apolitical army led by Chief of Staff Gen. Ashfaq Parvez Kayani, reminded the United States that Pakistan still holds the whip hand in Afghanistan. Forty percent of supplies shipped to NATO forces in Afghanistan by sea unload onto trucks in Karachi that then drive more than 1,000 miles up the entire length of Pakistan exiting through the Khyber Pass. Native drivers have little or no security and are frequently attacked on their way to Kabul. On Nov. 13 the Taliban hijacked 13 NATO supply trucks. So there was no resistance when the Pakistani army closed the main trunk road, backing up almost 1,000 trucks, "pending improved security."

The unspoken message to the U.S. military: Agree to joint intelligence exchanges in real time, and we'll simply deplore the action when your unmanned Predators bomb Taliban targets and kill Pakistani civilians. Any official endorsement of U.S. remote-controlled bombing in the Federally Administered Tribal Areas would unleash violent street demonstrations against the United States.

Pakistan, teetering on the edge of bankruptcy, saddled with 30 percent inflation, stock market down 35 percent, 25 percent unemployment, soaring food prices, and under attack from religious fanatics, was still waiting for a financial bailout from the International Monetary Fund in Washington. The $10.5 billion request was whittled down to $4 billion for immediate needs. Pakistan has to begin paying the debt down at 4 percent in 2011. China agreed to kick in $500 million, while further U.S. aid will have to wait for the Obama administration and the new Congress. Dire straits would be an understatement.

Yet the Pakistani army is pressing ahead with efforts to increase the range, accuracy and lethality of its nuclear-tipped ballistic missiles, sparked by what it still believes is a potential Indian threat. Parity with India, or even a qualitative edge over India, is a constant effort.

Pakistani defense correspondent Usman Ansari reported in Defense News that "with the deployment of the 2,500-kilometer Shaheen II, development has shifted to the proposed 3,500- to 4,000-kilometer range Ghauri-III, which is then to be replaced by the 4,000- to 4,500-kilometer Shaheen-III." The world's second-largest Muslim state (165 million people), one of the world's eight nuclear powers, is also working below prying Indian, Israeli and Western eyes on MIRV (multiple independently targeted re-entry vehicles) warheads, soon to be fielded on the Shaheen-II ballistic missile.

The interregnum in Washington and the global economic crisis provide a unique opportunity to broaden and deepen the strategic relationship between the United States and Pakistan. Long-term stability requires strengthening the world economy by helping Pakistan get back on its feet, beginning in FATA. Short of a bold stroke, Pakistan and Afghanistan -- and FATA in between -- remain the world's most dangerous neighborhood.

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