The US decision to blacklist the Haqqani Network may increase tensions with Pakistan, where the militant group has bases, substantial economic activities and ties to the country's intelligence services.
Hillary Clinton, the US secretary state, said yesterday that she would designate the Pakistan-based network, which has launched deadly attacks on US and allied troops in neighboring Afghanistan, as a "foreign terrorist organisation", making it possible for the US to sanction those who give the group financial and other support. She made the announcement the day before a deadline set by Congress for the administration to say whether the group meets the criteria for such designations.
Legislators are seeking to withhold part of the administration's requested US$2.2 billion (Dh8bn) in Pakistan aid next year unless the nation steps up the fight against the Haqqanis and other militants. Leon Panetta, the secretary of defence, is among US officials who have expressed frustration with Pakistan's failure to act. Yet Pakistan is a critical regional ally to the US and is seen as a vital player in Afghanistan's future stability.
"From a counter-terrorism perspective, a stability perspective, this was absolutely the right thing to do," Rick Nelson, director of the Homeland Security and Counterterrorism Programme at the Center for Strategic and International Studies in Washington.
"In designating Haqqani, it puts pressure on Pakistan," he said.
In practice, the terrorist label enables the US government to constrain the group's finances by going after its fundraising channels, according to Jeffrey Dressler, who leads the Afghanistan-Pakistan project at the Institute for the Study of War, a Washington policy group.
Pakistan considers the decision "an internal matter for the United States", according to a statement yesterday from its Washington embassy. "It is not our business. The Haqqanis are not Pakistani nationals. We will continue to work with all international partners including the US in combating extremism and terrorism."
Pakistani leaders have let the Taliban-affiliated Haqqanis operate from Northern Waziristan in the Federally Administered Tribal Areas of Pakistan "due to their concerns that Pakistan will be left alone to confront an unstable, an unfriendly or an Indian-influenced Afghanistan on its borders" after US troops leave Afghanistan in 2014, according to an April 30 report by the US defence department.
Michael Mullen, the former chairman of the joint chiefs of staff, has described the Haqqanis as a "veritable arm" of Pakistan's Inter-Services Intelligence.
Pakistani leaders have rejected that charge and said Pakistan is doing what it can against such militants.
Yet the Haqqanis have extensive economic interests inside Pakistan, as well as in Afghanistan, the Arabian Gulf, and possibly beyond, according to Mr Dressler.
"The network operates or partially owns many licit businesses, such as car dealerships, within some of Pakistan's most populous cities," he wrote in a recent paper.
The size of India means the only way Pakistan can check Indian power is asymmetrically, through the threat of its nuclear weapons or with militant groups, said Mr Nelson.
State department officials discussing the thinking behind Mrs Clinton's announcement yesterday emphasized that the decision to designate the Haqqani group was not targeted at any part of Pakistan's government. Pakistani officials were told in advance of the decision.
Pakistan's leaders have been hoping that the US would eventually acquiesce to a strong Haqqani role in any future dispensation for Afghanistan, Ms Curtis said. "Their mistake has been failing to use their ties with the network to moderate its behavior and to convince the Haqqani leadership to publicly break ties with Al Qaeda," she said.
Mr Nelson said Pakistani leaders may be afraid even to try. "Pakistan is riding the tiger of militancy," he said. "If they go in there and try to eradicate the Haqqani, which is a very lethal network, it could actually turn on the Pakistani government and they have very limited capacity to mitigate that kind of threat."
US frustrations with Pakistan have grown increasingly public as the Haqqanis have been responsible for some of the worst attacks on Americans in Afghanistan. In June, Mr Panetta said that it was "an increasing concern that safe havens continue to exist" in Pakistan and the Haqqani Network is able to flee to safety after mounting attacks in Afghanistan.
Vali Nasr, a former senior adviser on Pakistan at the state department, now the dean of the Johns Hopkins School of Advanced International Studies in Washington, said "the US is already treating the Haqqanis as a terrorist organization and has targeted their operations" in both Afghanistan and Pakistan's tribal areas.
Before yesterday's announcement, the US had slapped the group's leaders with individual sanctions, and has targeted the Haqqanis in military operations and clandestine drone strikes.
Last month, Afghan officials said a drone strike killed Badruddin Haqqani, the network's operational commander, in Pakistan's tribal areas. Badruddin was a son of Jalaluddin Haqqani, the group's founder.
Bloomberg News