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In this picture dated July 21, 2011, a Pakistani policeman searches a car at a check point in Swat valley. New threats risk delaying a handover to civilian leaders in Pakistan's Swat valley, where the army remains in force two years ago after stamping out a Taliban insurgency and restoring peace

A blindfolded man stands on explosives, trembling as he confesses to spying for the United States in Pakistan. Armed men in black balaclavas slowly back away. Then he is blown up.

One of his executioners – members of an elite militant hit squad – zooms a camera in on his severed head and body parts for a video later distributed in street markets as a warning.

Al-Qaeda, the Pakistani Taliban and the Haqqani network – blamed for a Sept. 13 attack on the U.S. embassy in Kabul – picked the most ruthless fighters from their ranks in 2009 to form the Khurasan unit, for a special mission.

The United States was escalating unmanned aircraft strikes on militants in the Pakistani tribal areas on the Afghan border and something had to be done to stop the flow of tips used for the aerial campaign run by the U.S. Central Intelligence Agency.

Militant groups don't have the military technology to match the American program, but they understand the value of human intelligence, and fear, in the conflict.

So the Khurasan were deployed to hunt down and eliminate anyone suspected of helping the Americans or their Pakistani government and military allies.

Just this week, an Afghan couple visiting Pakistan was shot dead for spying in North Waziristan, where the group operates.

"The whole community is scared of the Khurasan, and sometimes we ask each other 'have you seen the videos,'" said one man, who like everyone else interviewed about the Khurasan, asked to remain anonymous for fear of reprisals.

"They have people everywhere. How do I know who is an informer for them and who isn't?"

Made up mostly of Arabs and Uzbeks, the Khurasan, named after a province of an old Islamic empire, are a shadowy group of several hundred men who operate in North Waziristan, where Washington believes Haqqani network leaders are based. Since 2009, they have captured about 120 people they've accused of being spies.

The Khurasan, meanwhile, have gone rogue. Their methods have become so brutal and widespread that the Khurasan have alienated some of the militant leaders who created them, men who would not think twice about ordering beheadings.

"No one is above our law," a Khurasan militant said. They are not dependent on larger militant groups like the Taliban, funding their operations through kidnappings and challenging other militants who may want to rein them in.

"We tried very hard to reform the Khurasan," the top Taliban leader in North Waziristan, Hafiz Gul Bahadur, said. "But repeated attempts to correct them failed."

When suspected collaborators are caught, they are held in cells in a network of secret prisons across North Waziristan.

A committee of Khurasan clerics decides their fate. Most are declared guilty after what group members admit are "very, very harsh" interrogations.

"They are given electric shocks. If they don't help then an electric drill is used or the spies are forced to stand on electric heaters," one Khurasan operative said. "Or nails are hammered into their bodies."

Any attempt to intervene on behalf of people who are captured is risky. The Khurasan see that as collaboration with the enemy too and it is punishable by death.

Whenever someone is found guilty, the Khurasan make sure everyone knows about it.

"The spies are taken outside residential areas at night and shot dead," one operative said. "Their bodies are thrown on roadsides or squares in the town with a piece of paper warning others to refrain from this 'dirty' job of spying."

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