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A spate of ceasefires between the Pakistani army and government, on one hand and the Pakistani Taliban across northern Pakistan, on the other, are a watershed in the country's steady slide toward greater anarchy and loss of state control over large areas of territory.

The ceasefires are a strategic attempt by both the Afghan and Pakistani Taliban to unify and concentrate their forces for a spring offensive against the expected arrival of 17,000 more U.S. troops in southern Afghanistan, where Canada also has nearly 3,000 soldiers. These fast-moving developments come as the U.S. and NATO struggle to find a common strategy for Afghanistan and Pakistan before the NATO summit on April 2.

Mullah Mohammed Omar, the leader of the Afghan Taliban, has sent a letter to the commanders of the Pakistani Taliban, urging them to immediately stop attacks on the Pakistani army. "If anybody really wants to wage jihad, he must fight the occupation forces inside Afghanistan," Mr. Omar reportedly wrote. "Attacks on Pakistani security forces by militants in the tribal areas and elsewhere in Pakistan are harming the war against U.S and NATO forces in Afghanistan."

Mullah Omar, who is believed to be based in Quetta, in Pakistan's southern province of Baluchistan, followed up by sending envoys to the Federally Administered Tribal Areas (FATA) - the tribal belt adjoining Afghanistan - where the Pakistani Taliban leaders are based. His appeal was part of a concerted attempt by al-Qaeda and Afghan Taliban leaders such as Jalaluddin Haqqani, calling upon the Pakistani Taliban to unite.

Their efforts have resulted in an unprecedented show of unity by the once divided Pakistani Taliban commanders, who have been fighting Pakistani forces in FATA since 2004. Three major warlords of the region, Baitullah Meshsud and his two rivals Maulvi Nazir and Hafiz Gul have struck up a new alliance called the Shura-e-Ittehad ul Mujaheddin or Council of United Holy Warriors. They have called for a ceasefire with the Pakistani army in Bajaur, where the army has been carrying out an offensive since last August. Islamabad still has to respond to the offer.

The government and the army, however, have already ceded control to another branch of the Pakistani Taliban, further east in the Swat valley and Malakand district, just 100 miles north of Islamabad. Maulana Sufi Mohammed, a radical cleric who was freed last year after spending six years in jail for leading 10,000 Pashtun tribesmen in a futile attempt to oppose the U.S. invasion of Afghanistan in 2001, is now leading a peace march through the strategic Swat valley. He is trying to convince his son-in-law, Maulana Fazlullah, who leads the Swati contingent of the Pakistani Taliban and is closely allied to al-Qaeda and the Afghan Taliban, to accept the government's offer of a ceasefire and enforcement in Swat of Nizam-e-Adl (an Islamic justice system).

While the government insists the legal change will be only a limited application of Islamic justice through the local courts, the Taliban interpret it as allowing the full application of sharia, affecting all aspects of education, administration and law and order in the region.

Mr. Fazlullah's men, aided by Uzbeks, Chechens and Arabs, have fought bloody battles with the army over the past two years, finally driving the army out and taking control of most of Swat last year. The fighting has led to some 1,200 civilian deaths and the forced exodus of an estimated 350,000 people out of a population of 1.5-million. Mr. Fazlullah has blown up 200 girls' schools, hanged policemen and teachers and set up sharia courts. He now runs a parallel government. Rather than order the army to retake Swat, the Pakistan Peoples Party government in Islamabad led by Benazir Bhutto's widower, President Asif Ali Zardari, and the Awami National Party, a Pashtun secular party that runs the provincial government of the North West Frontier Province, have capitulated to the Taliban's demands in order to avoid more violence.

A PSYCHOLOGICAL BLOW

The deal has become an explosive issue in Pakistan. Right-wing, religious-minded citizens and politicians praise it for bringing peace to Swat, while liberals see it as an unmistakable turning-point in the country's losing battle against Islamic extremism. Even Sufi Mohammed, who is touted as a moderate compared to his son-in-law, has vowed to impose sharia across Pakistan and has denounced democracy as an evil, Western model. The psychological blow to public morale has been devastating.

Al-Qaeda and the Taliban now have the opportunity to create a new safe haven in Swat, well away from FATA, where they have been subjected to increasingly successful surprise attacks by U.S. drones. Sources in Peshawar say that extremist leaders are already moving to the safety of Swat, where drones have not been used so far.

The fallout in Swat will have long-term consequences. Although the military regime of former president Pervez Musharraf concluded several controversial short-lived ceasefires with the Pakistani Taliban, which allowed the Taliban to reinforce and widen their territorial control, the army never previously conceded major changes in the legal or political system. Even in Afghanistan, where the Afghan Taliban control several provinces, the Kabul government has never conceded the writ of the state, insisting that such provinces remain contested.

Mr. Zardari still has to sign off on the deal, and the ceasefire may not last, as others have not lasted before. This is, however, the first time that the government has surrendered an enormous area of northern Pakistan to extremists, who will govern by a separate set of laws and are dictating their terms to the state. Moreover the Taliban are unlikely to stop in Swat. From FATA, the Taliban have expanded their influence into the settled areas of NWFP and have virtually laid siege to the capital, Peshawar. The Swati Taliban will now have access to the heavily populated rural areas north of Islamabad.

The ANP were the first to insist upon the concessions. Besieged in Peshawar by Taliban suicide bombers who have vowed to eliminate its ministers and members of parliament, the ANP is paralyzed, divided and unable to govern. The ANP's decline into ineffectuality will have far-reaching consequences. Secular and democratic Pashtuns voted for it in overwhelming numbers in the general election last year, when the ANP ousted a government of Islamic fundamentalists installed by Mr. Musharraf.

The hope in Kabul and Islamabad was that the populist ANP, being a Pashtun party, would be better at rolling back the Taliban tide. That is now proving to be a false hope. Similarly, the ruling PPP is a secular and democratic party, and Mr. Zardari has repeatedly vowed to stand up against extremism, but the PPP's policy in Swat has not acted upon those promises.

The army is demoralized and overstretched and has declined to accept U.S. offers to retrain its regular forces in counterinsurgency, because it still believes there is a much larger threat from its traditional enemy, India. The army will not attempt to retake Swat unless it has the full support of the federal and provincial governments, while the recent terrorist attacks in Mumbai have led the army to reinforce its positions on the Indian border.

The weakening of Pakistan's resolve to counter extremism will further weaken an already devastated economy, which faces increasing joblessness, inflation and capital flight. The Obama administration has promised Pakistan $1.5-billion (U.S.) a year for the next five years, to be spent on social programs, but it will take many months before Congress will make such money available, while conditions Congress will impose - such as resisting the Taliban - Pakistan may be unwilling or unable to fulfill.

MAJOR SPRING OFFENSIVE

The ceasefires in Pakistan herald a major Taliban offensive in Afghanistan in spring, just as the new Obama administration is trying to conceive a new strategic policy toward Afghanistan, Pakistan and the whole region. The Afghan Taliban leadership based in Quetta is still largely untouched and freely able to provide logistics, ammunition, recruits and direction to the thousands of Taliban fighting Western forces in Afghanistan. The U.S. and NATO are also tasked with providing security for Afghanistan's presidential elections scheduled in August, but Kabul is beset with a constitutional crisis; President Hamid Karzai's term expires in May and he is refusing to step down.

The crisis in Pakistan leaves the U.S. and its allies with very few policy options. Large injections of aid money are desperately needed to give the government and the army the time and space to re-establish the writ of the state and revive the moribund economy. Yet it is even less clear now whether the Pakistani state is willing or able to take on the Pakistani Taliban or co-operate with NATO forces to block the Taliban who are flooding into southern Afghanistan to take on the newly arriving U.S. troops. What is certain is that the region is rapidly descending into chaos.

Ahmed Rashid is the author of the best-selling Taliban and Jihad. His latest book is Descent into Chaos: The United States and the Failure of Nation Building in Pakistan, Afghanistan and Central Asia (Penguin 2008).

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