The main focus of the Bush administration's war on terror has been countering the threat posed by Al Qaeda and the Taliban to Afghanistan and Pakistan. Now, the latest evidence indicates that Islamist extremists have broadened their offensive to include India—and Pakistan's own intelligence agencies are complicit. Unless Washington broadens its counterterrorism strategy and forces Islamabad to crack down, the Islamists could end up wreaking havoc not only in Pakistan but also in India—eight times larger, a rising global power with growing ties to the United States and a huge and restive Muslim minority.

Since mid-2006, a series of increasingly frequent bombings in Indian cities have killed 400 people. Muslim dissidents with links to Pakistani Islamist groups have been blamed for the attacks. India has tried in vain to get intelligence sharing from the United States to break these links, but so far to no avail. Vijay Shanker, director of India's Central Bureau of Investigation, complains that New Delhi has "given all possible help to the United States" in important counterterrorism cases, "but similar cooperation does not seem to be happening from the other side." This is despite Indian claims that many of the terrorist attacks have been orchestrated by Dawood Ibrahim—a Bombay Muslim underworld boss now hiding out in Karachi.

As Ibrahim's role suggests, there are local roots to India's Islamist terror problems. The country's 130 million Muslims feel vulnerable in the face of Hindu extremist violence such as the 2002 slaughter of 2,500 Muslims in Gujarat riots. Still, growing evidence suggests that Indian Muslim extremists are getting key logistical and technical help from groups such as Lashkar-e-Taiba in Pakistan and Harakata-ul-Jihad-e-Islami in Bangladesh.

So far India has been careful not to blame the Pakistani government for aiding these groups and has praised President Asif Ali Zardari for calling anti-Indian Islamist insurgents in Kashmir "terrorists." But while the level of official Pakistani involvement is uncertain, it is clear that Islamist groups in Pakistan have been allowed to grow unhindered—making a mockery of Islamabad's promises to curb terrorism.

There is nothing new in this. For years, Pakistan's powerful Interservices Intelligence agency (ISI) has been accused of supporting Islamists in Kashmir and, more recently, in Afghanistan. Pakistan's army chief of staff, Gen. Ashfaq Kiyani, a secular moderate, has promised to crack down on such activities. But according to Amir Liaqat Hussain, who served as minister of state for religious affairs under the previous president, Pervez Musharraf, "there is an ISI within the ISI which is more powerful than the original and is still orchestrating" Islamist activities. Hussain says many pro-Islamist officers still hold key jobs in the ISI apparatus and retain links to former hard-line directors.

To its credit, Washington has recently begun to acknowledge the problem. Administration officials have openly blamed high-level ISI officers for helping to stage the July 7 bombing of the Indian Embassy in Kabul that killed at least 41 people. But despite the appointment of a new ISI director Sept. 30, no heads have rolled, and more important, Washington has failed to use its enormous aid leverage to get the new civilian government of Pakistan to curb the ISI's Islamist ties.

It is time for the Bush administration to turn the screws. Since 2001 the United States has given Pakistan $8.3 billion in aid, earmarked for specific military and economic purposes. Washington also doles out $700 million a year in "Coalition Support Funds," unmonitored cash subsidies to Pakistan's armed forces. This largesse is supposedly to reimburse the Pakistanis for their expenses in fighting Al Qaeda and the Taliban. But a U.S. General Accounting Office investigation found that "neither the Defense Department nor we could determine how much of the costs reimbursed were actually incurred."

Washington should stop throwing good money after bad. All future aid to Pakistan should be conditioned on wide-ranging cooperation in counterterrorism. This means purging the ISI of Islamists once and for all, starting with those known by U.S. intelligence to support the Taliban. It means stopping radical madrassas, like the Jamia Binoria in Karachi, from training jihadists. And above all, it means cracking down on Islamist groups that are not only a threat to Pakistan itself but are also helping terrorists in India. The United States should insist that Pakistan share intelligence relating to the cross-border activities of these groups in India and should press for the extradition of suspects, like Dawood Ibrahim, wanted by Indian authorities.

In seeking to combat Al Qaeda and the Islamist threat to Pakistan, the United States need not and should not undermine its friendship with an increasingly powerful India. After all, New Delhi will remain vital to Washington's interests long after Osama bin Laden has been forgotten.

Harrison is director of the Asia Program at the Center for International Policy and a Senior Scholar at the Woodrow Wilson International Center for Scholars.
URL: http://www.newsweek.com/id/164590