ISLAMABAD, Pakistan (AP) -- On the outskirts of the Pakistani capital lives a militant considered so powerful that Osama bin Laden consulted with him before issuing a fatwa to attack American interests.
Fazle-ur-Rahman Khalil heads Harakat-ul-Mujahedeen, a terrorist group closely aligned with al-Qaida and a signatory to bin Laden's anti-U.S. fatwa in 1998. Khalil has also dispatched fighters to India, Afghanistan, Somalia, Chechnya and Bosnia, was a confidante of bin Laden and hung out with 9/11 mastermind Khalid Sheikh Mohammed.
Pakistani authorities are clearly aware of Khalil's whereabouts. But they leave him alone, just as they tolerate other Kashmiri militant groups nurtured by the military and its intelligence agency to use against India.
Khalil is also useful to the authorities because of his unusually wide contacts among Pakistan's many militant groups, said a senior government official who is familiar with the security agencies and who spoke on condition he not be identified fearing repercussions.
Khalil's presence in an Islamabad suburb, confirmed to The Associated Press by Western officials in the region, underscores accusations that Pakistan is still playing a double game - fighting some militant groups while tolerating or supporting others - even after the solo U.S. raid that killed bin Laden on May 2.
The U.S. Congress, enraged that bin Laden found refuge for at least five years down the street from Pakistan's equivalent of West Point, has threatened to cut off the billions of dollars in aid being spent here.
Obama administration officials and U.S. Army officers are trying to rebuild the relationship, considered vital to American hopes of negotiating an end to the Afghan war, but if anything the two sides appear to have drifted further apart in recent weeks.
Pakistan's intelligence service has arrested five Pakistanis who fed information to the CIA before the American raid that killed bin Laden, according to a Western official in Pakistan.
The group of detained Pakistanis included the owner of a safe house rented to the CIA to observe bin Laden's compound in the military town of Abbottabad, a U.S. official said. The owner was detained along with a "handful" of other Pakistanis, said the official.
Also, CIA Director Leon Panetta confronted Pakistan's intelligence service about tipping off militants running bomb factories aimed at killing U.S. soldiers in Afghanistan. Pakistan denied tipping them off. The militants belong to the Haqqani network, an Afghan Taliban faction that has ties to al-Qaida.
Khalil's Harakat-ul-Mujahedeen, blamed for a deadly attack on the American Consulate in Karachi in 2002, has links to the Haqqanis and is considered a terrorist organization by the U.S. Hundreds of militants are thought to belong to his organization, though the strength of these groups are the links they share with each other, say analysts.
Khalil himself is not on any U.S. wanted list. In the Islamabad suburb of Golra Sharif, he lives in a nondescript two-story compound that includes a seminary or religious school, hidden behind a traditional high wall protected by barbed wire.
Reached by the AP on his cell phone last month, Khalil dismissed suggestions that he may have been in touch with bin Laden while the al-Qaida leader was hiding in Abbottabad.
"It is 100 percent wrong, it's rubbish," Khalil said. "Osama did not have contact with anybody." The AP obtained Khalil's phone number from a former aide who has since left the terror organization.
The Pakistani senior government official who spoke with AP said Khalil has been arrested twice but each time was released on orders from Pakistan's intelligence agency.
"He was significant for Osama bin Laden," the official said. "He has connections with all these groups in Waziristan but he is living here and we don't go after him. He is the one you go to when you need to get to these groups," tracking kidnap victims for example.
Khalil was once the boss of terror leader Ilyas Kashmiri, believed killed in a drone strike on June 3.
Like most of the militant groups that get a wink and a nod from Pakistan's security agencies, Harakat-ul-Mujahedeen's primary focus is Kashmir, a picturesque region divided between India and Pakistan and claimed by each in its entirety. Kashmir has been the cause of two of three wars between the South Asian neighbors and brought them perilously close to a nuclear confrontation in 2000.
Khalil's group has kidnapped foreigners in Indian Kashmir, killing one. His group also helped in the 1999 hijacking of an Indian airlines plane that resulted in the release of three militants, including Ahmed Omar Saeed Sheikh, who is now on death row for his part in the 2002 killing of Wall Street Journal reporter Daniel Pearl.
Khalil's militant ties include the anti-Indian Lashkar-e-Taiba group, blamed for masterminding the November 2008 assault on Mumbai that killed 166 people. The AP learned from the same official that seven training camps are operating in Pakistani Kashmir and most of them are run by Jamaat-ud-Dawwa, the name Lashkar-e-Taiba took after being banned.
"There are seven jihadi camps working in Kashmir right now, giving them explosives training," the official said. He said military and intelligence agencies say the camps provide Pakistan with "strategic depth."
"They say we need them, otherwise India will treat us like the rest of South Asia, like they can dictate," he said. "It is only the military and intelligence. The government has no say."
Pakistan has said it has severed its links with these Kashmiri militant groups, though many suspect that is not the case. But it does recognize the dangers posed by some militant groups in another corner of Pakistan - near the Afghan border.
Since deploying troops in 2004 to the region near the Afghan border, Pakistan has lost 3,000 soldiers to militant attacks, more casualties than NATO has suffered over 10 years in Afghanistan.
"Our concern at this point in time is our involvement with northwest Pakistan. We cannot manage to open a new front in central Punjab and in south Punjab," where these groups are headquartered, said a senior military official on condition of anonymity. "Our army is not well trained for counterterrorism in urban centers and we do not have the capacity in our civil law enforcement agencies" to go after these groups.
But many Pakistanis wonder how they got to this place, besieged by militants who bomb them daily while suffering a litany of criticisms and perceived humiliations from their U.S. allies for not doing enough.
Dr. Pervez Hoodbhoy, a physicist, columnist and peace activist, recently dubbed his homeland "Jihadistan," saying it wasn't always this way. He laid the blame on an array of players for the current state of affairs in Pakistan.
In a recent column, he first pointed the finger at former military dictator Gen. Mohammed Zia ul Haq. Zia made Islamic radicalism the centerpiece of his military and political strategy, launching the country and the security forces on a path of religious extremism.
Hoodbhoy then blamed Washington's Cold War doctrine that partnered the United States with Saudi Arabia, Egypt and Zia's Pakistan in the 1980s to embrace Islamic radicalism to defeat Soviet forces in Afghanistan. The partnership brought Islamic radicals from across the Middle East to Pakistan.
The strategy worked, and the Russians left Afghanistan. But the cost of victory was a toxic mix of Islamic radicals.
"Jihadistan is a messy place these days, a far cry from the simple bastion of anti-communism in the 1980s," he wrote. "Today the military must kill some of its former proteges and some radicals even as it secretly supports others."
A former U.S. ambassador to Islamabad says throwing money at Pakistan won't wean it off jihadi groups so long as its fear of India dictates its security policies.
"It is the perception of India as the primary threat to the Pakistani state that colors its perceptions of the conflict in Afghanistan and Pakistan's security needs," Anne Patterson said in a 2009 cable made public by WikiLeaks.
She said the United States should discourage India from excessive involvement in Afghanistan, and scale back American military sales to New Delhi.
"We need to reassess Indian involvement in Afghanistan and our own policies toward India, including the growing military relationship through sizable conventional arms sales, as all of this feeds Pakistani establishment paranoia and pushes them closer to both Afghan and Kashmir-focused terrorist groups while reinforcing doubts about U.S. intentions," Patterson said in the memo.
Kathy Gannon is AP's special regional correspondent for Pakistan and Afghanistan. AP writer Asif Shahzad in Islamabad contributed to this report.