In the global struggle against Islamic extremism and terrorism, Pakistan may be the most important country most Americans don't know is important. That state of blissful ignorance had better change -- and soon.

Pakistan, a teeming country of 165 million, is quickly becoming one of the world's most dangerous terrorist havens. Regrettably, a resurgent Taliban and a new generation of al-Qaida have found the welcome mat out and the light on in Pakistan's lawless tribal areas.

Dealing with this double trouble in a country where the Taliban and al-Qaida are often among kith, kin and kindred spirits makes successfully managing relations with Islamabad one of Washington's most critical foreign policy and security challenges.

The Pakistani government's truce with pro-Taliban tribesmen in several districts of the Federally Administered Tribal Area (FATA) along the Afghanistan border may be good for Pakistani President Pervez Musharraf's political health, but it's hurting Afghanistan -- where the fight with the Taliban is definitely on. For instance, since Islamabad reached a peace pact with tribal leaders in North Waziristan in September, Taliban cross-border attacks into Afghanistan quickly increased a phenomenal 300 percent, according to the U.S. military. Sheer coincidence? Not a chance.

Musharraf said the deals would quiet the restive Pashtun tribal areas, even expel foreign extremists from the area, and stop Taliban cross-border raids into Afghanistan. Equally important, the agreements also were meant to reduce the pressure on his government from the two most powerful institutions in Pakistan: the military and the mosque.

The Pakistani army has lost 500 to 700 soldiers in the tribal areas since 2004 because of shortfalls in both capability and competence. Musharraf, who led the army before taking power in a 1999 coup d'etat, still holds the title general and is sympathetic to military opinion about army losses.

Musharraf is riding a tiger of religious fervor, as well. Some powerful Muslim clerics and religious-based political parties pushed hard to end what they saw as the army's pro-American, anti-Pashtun, Pakistani-on-Pakistani violence in the FATA. Although most Pakistanis don't support an extremist agenda, Musharraf cannot ignore the Islamists, many of whom have links and influence with the military.

Although there has been some joint Pakistani-tribal military action in recent months against Uzbek and Chechen jihadists, it's not good news on the anti-Taliban front. With the support of the local Pashtun tribal leaders (the Taliban are also ethnically Pashtun), Taliban fighters are able to find sanctuary in the FATA for logistics support, planning, training and operating across the border in Afghanistan against coalition (U.S., NATO, Afghan and other) forces.

Taliban fighters also head across the Hindu Kush mountains to Pakistan to rest and regroup out of the killing zone over the harsh winter before coming back in a spring offensive. That's exactly what we're experiencing now in Afghanistan. It's a perfect haven: Pakistan's government is reluctant to take action against the Taliban, and coalition forces across the border can't do so, either; it's politically off-limits.

The Taliban may also still be receiving support from the highly influential Inter-Services Intelligence (ISI) directorate. The ISI played a key role in creating the fundamentalist Taliban in the 1990s to start with -- and may still be a big backer, despite Islamabad's public protestations to the contrary. The ISI saw the Taliban as the best way for Pakistan to influence its Afghan neighbor following the Soviet withdrawal, to ensure Afghanistan wouldn't fall into rival India's sphere of influence -- or anyone else's that might lead to claims on Pakistani territory.

Finger-Pointing and Rhetoric

Cross-border finger-pointing and overheated rhetoric between Musharraf and Afghan President Hamid Karzai, who have plenty of heart-felt antipathy for one another, certainly doesn't encourage Islamabad to deal more strictly with the Taliban, either.

But numerous press accounts indicate that Pakistan security services may have arrested Taliban leader Mullah Obaidullah Akhund in late March. If true, Akhund, a deputy of Taliban chief Mullah Omar, would be the most senior Taliban leader arrested by the Pakistanis, marking a watershed in Islamabad's counterterrorism efforts. Arresting such a key figure in the Taliban movement would signal that the Taliban is no longer safe in Pakistan. It would also help to improve Pakistan-Afghanistan ties, which have deteriorated significantly over the past year because of the upsurge of violence in Afghanistan.

Lastly, such an arrest would help dispel doubts in the U.S. about Pakistan's commitment to denying sanctuary to Taliban fighters, despite the reported presence of 80,000 Pakistani troops in the FATA.

A resurgent al-Qaida in Pakistan is another big problem. In fairness, Musharraf has been helpful in fighting al-Qaida in Pakistan, killing or capturing as many as 700 fighters since Sept. 11, 2001 -- and turning over some 350 Taliban to the U.S. for detention and interrogation, at least according to claims in Musharraf's book, "In the Line of Fire." Even if Musharraf's numbers are exaggerated, it is a fact that almost all senior al-Qaida leaders -- including Khalid Sheikh Mohammed, Ramzi bin al Shibh, Abu Zubaida and Abu Faraj al Libby -- captured since 9/11 have been nabbed in large Pakistani cities.

But despite this, we're seeing an uptick in al-Qaida activity out of Pakistan in recent months. For example, late last year, Britain's domestic intelligence service, the MI5, revealed that it has foiled five terror attacks since the horrific "7/7" subway and bus bombings in London in 2005.

That's great news on the face of it. But MI5 is now tracking more than 20 plots, involving as many as 200 terrorist cells, and watching more than 1,500 people associated with them in the United Kingdom -- most of whom are of Pakistani origin. Of course, those are just the plots they know of.

U.S. and British intelligence -- among others -- now believe al-Qaida is regrouping in Pakistan's nearly autonomous tribal belt alongside the Taliban. This puts the United Kingdom, because of its substantial South Asian ties -- 800,000 Britons are of Pakistani origin -- at significant risk of more terrorism.

Indeed, four of the five would-be fertilizer bomb conspirators recently sentenced in London are of Pakistani origin, as were two of the 7/7 suicide bombers. Some of the men from both plots were trained in al-Qaida-associated camps in Pakistan. Britons make 400,000 trips to Pakistan every year.

There has already been a close call of nightmarish proportions for the U.S. out of this growing threat: Last summer's plan by homegrown, U.K.-based al-Qaida acolytes to bring down 10 or so U.S.-bound airliners over the Atlantic using liquid explosives had Pakistani ties. There was even talk among the conspirators to destroy the airliners not over the Atlantic but, instead, over major U.S. cities in an effort to kill as many people as possible, according to British government sources. Here's how it works: Recruited by local imams, British recruits head to Pakistan for indoctrination and training. Once schooled in radicalism and terrorism, al-Qaida's new foot soldiers return home, staying in touch with their Pakistani al-Qaida contacts, who either encourage acts of terrorism -- or order them.

MI5's then-director general, Eliza Manningham-Buller, summed it all up in a November speech: "What we see at the extreme end of the spectrum are resilient networks, some directed by al-Qaida in Pakistan, some more loosely inspired by it, planning attacks including mass-casualty suicide attacks in the U.K." Indeed, it's probably worse. Al-Qaida in Pakistan is not only living and working alongside the Taliban, but it also has allied itself with other indigenous Pakistani groups, including Kashmiri militants targeting India.

But while intelligence, homeland security and law enforcement on both sides of the Atlantic work tirelessly, U.S. and U.K. counterterrorism cooperation isn't the entire solution to either the Taliban or al-Qaida problems. The answer lies in Pakistan.

The Bush administration's doing what can be done to shore up Pakistan's control over the tribal belt and its Afghan border: helping equip the paramilitary Frontier Corps; funding more than 100 new border outposts; providing high-tech equipment, and fixed wing aircraft and helicopters for surveillance.

Since 9/11, U.S. economic, development and security aid has exceeded $10 billion. Understanding Pakistan's weak state status, Congress is considering as much as $700 million in assistance this year. The White House even brought together Musharraf and Karzai for some much-needed "relationship counseling" in Washington to improve communication. Perhaps evidence of some progress, the two leaders met in early May in Turkey for talks, reportedly on improving intelligence cooperation.

The question, unfortunately, has become unavoidable: Is Islamabad serious about fighting extremism and terrorism? True, Pakistan has made invaluable contributions to combating al-Qaida over the past five years, capturing key leaders and providing tips that led to the foiling of deadly plots, including last summer's attempted airline bombings out of the U.K.

And, yes, Musharraf took a huge political risk in late October, giving the go-ahead to a Predator UAV missile strike against a compound thought to be hosting Osama bin Laden's No. 2, Ayman al Zawahiri, missing him by just hours. In a likely response to the Zawahiri attack, terrorists targeted a Pakistan army base in November, killing more than 40 Pakistani soldiers. Plus, the Pakistani army may well be working with tribal forces in the FATA along the Afghan border to kill, capture or force out some entrenched foreign jihadists, as Islamabad claims. But the facts on the ground indicate that tribal leaders are ignoring their promises to Musharraf. Instead, they appear to be facilitating an extremist resurgence in a Taliban mini-state. Indeed, bin Laden and Zawahiri are believed to be hiding there today, according to U.S. intelligence.

Musharraf is clearly on the horns of a dilemma. More actively moving against the militants incurs the wrath of Pakistan's religious leaders, Islamic political parties, army and Taliban supporters -- groups Musharraf ignores at his peril. Not acting is also problematic. Pakistan is a regular target of Islamic terrorists, too. Musharraf has survived three assassination attempts. A recent spate of attacks includes suicide bombings in Peshawar and Islamabad, and a raid on a Pakistani military convoy. Suicide bombings are at an all-time high this year.

Of course, if we pressure Musharraf too hard, it could mean losing Pakistan altogether in the terrorism fight. He's no perfect partner, but he's been an ally against terrorism nonetheless. In war, sometimes the only bad ally is the ally you don't have.

Pakistan needs to do more, though. It needs to find the political will to fully deny all terrorist groups, including Kashmiri militants, the use of its territory. Pakistani military action in the tribal belt, even if not totally effective, helps keep the pressure on al-Qaida and Taliban militants, hindering their ability to plan and operate both in Pakistan and abroad.

Otherwise, Pakistan, the world's second most populous Muslim country, risks facing endless instability on its borders with both Afghanistan and India -- not to mention increasing isolation from the international community, which will come to see it more as part of the problem than the solution. But as long as Musharraf fails to act decisively, both Pakistan and the rest of the world will likely pay a heavy price.

Peter Brookes is a senior fellow at The Heritage Foundation and the author of "A Devil's Triangle: Terrorism, WMD and Rogue States."