By John Chalmers
ISLAMABAD (Reuters) - Washington's stunning charge that Pakistan's spy service is backing violence against U.S. targets in Afghanistan has pushed Islamabad into a tight corner: either it cleans up the powerful agency or it faces the wrath of an angry superpower.
There has never been much doubt in Washington that the shadowy Inter-Services Intelligence agency (ISI) plays a "double game," supporting some militants to extend its influence in Afghanistan and counter India, while targeting others.
But the gloves came off on Thursday when U.S. Chairman of the Joint Chiefs of Staff Admiral Mike Mullen bluntly described the Haqqani militant network as a "veritable arm" of the ISI and accused Pakistan of providing support for the group's September 13 brazen attack on the U.S. embassy in Kabul.
It was the most serious allegation leveled by Washington against the nuclear-armed South Asian nation since they allied in the war on terror in 2001, and the first time it has held Islamabad responsible for an attack against the United States.
"Mullen has finally put Pakistan on the spot and I don't think he has left any ambiguity about the feelings of the U.S. about the ISI," said Rasul Bakhsh Rais, an Islamabad-based academic and political columnist. "Mullen has thrown the ball into Pakistan's court."
A STATE WITHIN A STATE
Pakistan's equivalent of the U.S. Central Intelligence Agency (CIA) -- with which it has a paradoxical relationship of cooperation and deep distrust -- the ISI has tentacles so far-reaching that it is often seen as a state within a state. Widely feared by Pakistanis, it is widely believed to employ tens of thousands of agents, with informers in many spheres of life.
Created in 1948, the ISI gained importance and power during the 1979-1989 Soviet occupation of Afghanistan. With the United States and Saudi Arabia, it nurtured the Afghan mujahideen, or Muslim holy warrior guerrillas, helping them win the war and paving the way for the creation of the Taliban.
Although Pakistan officially abandoned support for the Taliban after the September 11 attacks on the United States in 2001, analysts say elements of the ISI refused to make the strategic doctrinal shift.
U.S. officials say the ISI seemed to turn a blind eye -- or perhaps even helped -- as Taliban and al Qaeda members fled into Pakistan during the U.S. invasion of Afghanistan after the 9/11 attacks, and "rogue" elements of the agency have since maintained ties with, and support for, the Afghan Taliban.
The main preoccupation of the ISI, and the Pakistani military, is the threat from nuclear-armed rival, India.
It was heavily involved in the 1990s in creating and supporting Islamist factions that battled Indian forces in the disputed region of Kashmir, and now it sees the Taliban as tools to influence events and limit India's role in Afghanistan.
Washington also believes the agency protected Abdul Qadeer Khan, lionized as the "father" of Pakistan's bomb, who was arrested in 2004 for selling nuclear secrets to Iran, Libya and North Korea.
When militants attacked the Indian city of Mumbai in 2008, killing 166 people, New Delhi accused the ISI of controlling and coordinating the strikes. Pakistan denies any active ISI connection to the Mumbai attacks.
Islamabad often points to the thousands of troops killed in action against militants on Pakistani soil as proof of its commitment to fighting terrorism.
However, Washington has grown increasingly suspicious and ready to criticize its ally, especially after it emerged that al Qaeda leader Osama bin Laden -- who was killed in a raid by U.S. Navy SEALs in May -- had lived in a garrison town a two-hour drive from Islamabad, by some accounts for up to five years.
ISI UNDER PRESSURE?
Admiral Mullen's tirade against the ISI over its alleged links with the Haqqanis, which has inflicted heavy casualties on U.S. forces in Afghanistan, took that criticism to a new level.
Retired brigadier Asad Munir, who headed up the military intelligence agency in the insurgency-plagued tribal areas of northwestern Pakistan from 1999 to 2003, said relations between the United States and the ISI had sunk to their lowest ebb.
"It has never been so bad over the last 20 years. They have never accused the ISI so baldly ... This time they have come out openly (to say) that they have evidence."
The question, though, is whether the intelligence agency will feel under any real pressure to change.
The United States has few options beyond the feisty rhetoric displayed by the outgoing Joint Chiefs of Staff.
It could halt its security and economic aid for Pakistan. It could also step up drone strikes in Pakistan's North Waziristan, where elements of the Haqqani network enjoy sanctuary, but a more robust military operation would be highly risky.
However, the ISI by itself is unlikely to feel any significant pressure at home. The civilian government is weak and cowed by the military establishment, and Pakistani public opinion is increasingly hostile toward the United States.
"Why should they be on the defensive?" said Ayesha Siddiqa, a military analyst in Islamabad. "These comments are coming at a time when the relationship is very weak, so it doesn't make a difference because they are well protected on the basis that there is anti-American public opinion."
(Additional reporting by Chris Allbritton and Rebecca Conway; Editing by Sanjeev Miglani)