SOFT TARGET: Pearl's (below) abduction was a setback for Musharraf

For the swarm of journalists waiting for Ahmed Omar Saeed Sheikh to be produced in the Karachi Anti-Terrorist Court, his statement to the court on February 14 was no less than a bombshell. Sheikh Omar, as he is commonly known, had been brought to the court in the tightest of security, bundled inside with his face hidden under a shawl so as not to compromise his legal identification. He stood accused of masterminding the kidnapping of Wall Street Journal reporter Daniel Pearl, who disappeared from Karachi on January 23 while attempting to make contact with militant Islamic groups.

As he entered the courtroom, Sheikh removed the shawl despite the protestations of the policemen ringing him. And then, as the police sought to take his judicial remand, he asked the judge for permission to make a statement. When he was allowed, he admitted to kidnapping Pearl. "Right or wrong, I had my reasons," he said in a low tone. "Our country shouldn't be catering to America's needs." Even more sensational than his indication of his motives was Sheikh's claim that Pearl had been killed. "As far as I know," he said, "he's dead."

The Pakistan Government-already embarrassed by its inability to trace the American journalist before President Pervez Musharraf's visit to Washington-wasted no time in dismissing Omar's claims. Pearl's kidnapping cast a cloud over Musharraf's first state visit to the US since he seized power in 1999. The Pakistan Government was hoping to cash in on his transformation from a pariah Third World dictator to one of America's closest and most praised allies in the "war against terror". On Pakistan's agenda were major trade concessions, increased monetary support, foreign investment and pushing for a greater international mediatory role in Kashmir. But the Pearl case threatened to sideline these issues, at least as far as the media were concerned.

Musharraf himself attempted to put a smart spin on the Pearl kidnapping by pointing out that his Government had taken heavy domestic risks in siding with the US. If anything, the US seems now to have gone a step further and linked a step-up in economic aid to a continued crackdown on extremists.

Senior administration officials in the US privately say the time has come for Musharraf to walk the talk. They are also concerned that the crackdown ordered by the General does not extend to Kashmir militants and are hence looking for a follow through. The US steered away from getting drawn into any intervention on Kashmir. The reiteration of return to democracy by this September was obviously an uncomfortable moment for the General. But the US Administration believes that it is an integral element in the long-term strategy of weaning the country away from the clutches of Islamic extremists. It fears that the political vacuum created by military rule would get filled by religious extremists.

The US Administration, while ignoring Musharraf's requests for a step-up in arms supplies-including release of the long-suspended sale of 28 F-16s-is providing $192 million emergency assistance to meet costs incurred in aiding US military forces in Operation Enduring Freedom. It has allocated $600 million in economic aid this financial year for Pakistan and has proposed $250 million in its 2003 budget. But much of the assistance is to help Pakistan restructure its education system, particularly the madarsas that have become breeding ground for terrorists of late. Moreover, the aid has to be authorised by the US Congress which has made it clear that its nod would depend on whether Musharraf is able to translate his words into action.

-By Hasan Zaidi in Karachi with Anil Padmanabhan in Washington DC