By Michael Georgy

RAWALPINDI, Pakistan (Reuters) - When Pakistan Army Sergeant Abdur Rehman hears America's oft-repeated demand that Pakistan do more to fight militants, he glances down at the stumps of his legs and wonders what more it wants from him.

A mortar bomb shredded him from the waist down as he led an advance against Taliban fighters in 2007 in Pakistan's unruly northwestern tribal areas on the Afghan border.

Instead of enjoying full retirement benefits, he underwent rehabilitation, was given artificial limbs and returned as a commander to a desk job in the militant-infested region where he was wounded.

"What more can Pakistanis do?," asked Rehman, 35.

That question has often strained ties between Washington and Islamabad, but it has been posed far more frequently since U.S. special forces killed Osama bin Laden in May in a Pakistani town, where he had apparently been living for years.

Admiral Mike Mullen said before retiring as chairman of the Joint Chiefs of Staff last month that a militant group that had attacked U.S. targets in Afghanistan was a "veritable arm" of Pakistani intelligence.

Then President Barack Obama put Pakistan on notice that it must go after militants or risk severing ties to the United States, the source of billions of dollars in aid.

Pakistan denies links with militant groups and says it has sacrificed more than any other country that joined the U.S. "war on terror" after the September 11, 2001 attacks.

Officials say more than 3,000 Pakistani soldiers have been killed, greater than the combined death toll among NATO forces in Afghanistan. Nearly 10,000 have been wounded.

"Imagine how the U.S. would react if such a number had lost their lives and then comments would come from other countries, which said that, 'You are the problem, you are part of the problem'," Pakistani Foreign Minister Hina Rabbani Khar said in an interview with an American radio program.

For the relatives of soldiers killed in battles against the militants, the charges are especially outrageous.

LIVING ON MEMORIES

Captain Omerzeb Afzal Baig and two other soldiers died in the prime of their lives when their vehicle was blown apart in May 2009 by a remote-controlled roadside bomb planted by the Taliban.

His father sits proudly in the family living room beside a large photograph of Omerzeb in military gear, taken two hours before his death in a quick reactionary force mission he had volunteered to lead.

"Look at his smartness, look at the way he is smiling, right in the battlefield area. Look at the way that he is all prepared," said Muhammad Afzal Baig, himself a retired colonel.

"Do you see anything like worries on his face? Not a single wrinkle. He is all prepared; he is fully charged, and that is what a Pakistani soldier is made of."

The United States wants Pakistan to crack down on militants who cross its border to attack Western forces in Afghanistan.

But although it has one of the largest militaries in the world, Islamabad says its hands are full fighting militants who attack government and civilian targets in Pakistan.

At a military rehabilitation hospital in the garrison city of Rawalpindi, amputees are surprisingly frank about how vulnerable troops have become to the Taliban militants, described as masters of guerrilla warfare, with plenty of firepower and precision.

"You just don't know what to expect. When you launch an attack they can hit you from any side," said wheelchair-bound private Zaheer Abbas, recalling how he flew up in the air after stepping on a home-made Taliban bomb.

"Everyday, they are growing in number. The situation is getting worse."

PARALYSIS

Critics say Pakistan is partly to blame for the chaos because it nurtured militant groups for years and used them as proxies in Afghanistan or against rival India - creating a Frankenstein in its own back yard.

Pakistani officials blame U.S. policies - such as the 2001 invasion of Afghanistan - for the instability. Thousands of militants fled from Afghanistan to northwest Pakistan at that time and formed alliances with other fighters.

Nowadays, Islamabad complains that Washington is ungrateful no matter how many losses Pakistan suffers battling militants in the border region. Many of its soldiers are determined to see the battle through.

Private Ansar Javed for instance. During a three-hour battle to reach a Taliban position in May, the 24-year-old slowly made his way up a mountain, dodging incoming rockets and grenades.

Then, in an instant, a sniper's bullet struck the front of his neck, causing paralysis from the waist down. He is barely able to move his arms and has no control over his bowels.

"We are doing everything we can. We have to finish them off," he said, speaking from a hospital bed.

"We don't need anyone's help," he added bitterly, referring to the United States

The tense alliance between the two nations is likely to come under more stress, with stepped up demands from the United States for Pakistan to take decisive action against militants - including those Pakistan regards as assets.

Washington hopes to stabilize the region as much as possible by the end the of 2014, when all NATO troops are due home from Afghanistan. For Pakistan, any relationship with the militants in Afghanistan will be a vital lever after the withdrawal.

The calculations mean little for people like Sahib Khan Awan, who has already given his oldest son, Faiz Sultan, to the cause of stamping out militancy.

The lieutenant hurled grenades into a Taliban bunker killing 30 fighters before he was shot repeatedly in the chest. When his son's commander phoned him with the tragic news, Sahib asked just one question.

"I said, 'Tell me where did my son receive the bullets'? If the bullets are in his back, then just bury him there. If he has bullets in his chest, then bring him to my village," he said, explaining that only cowards run from the enemy.

"The commander told me, 'Congratulations. Your son has received 22 bullets in his chest'."

That same day Sahib signed up his other son to help fight the Taliban.

(Editing by Chris Allbritton and Raju Gopalakrishnan)