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PIEGEL: Pakistan is in a major state of crisis. Close to 2.5 million people have fled the areas of fighting in the northwest and the Swat Valley. There are attacks almost daily. Is Pakistan on the verge of collapse? Musharraf: This is wrong. Nothing can happen to Pakistan as long as the armed forces are intact and strong. Anyone who wants to weaken and destabilize Pakistan just has to weaken the army and our intelligence service, ISI, and this is what is happening these days. Lots of articles have been written claiming that Pakistan will be divided, that it will fall apart or become Balkanized. I personally feel there is some kind of conspiracy going on with the goal of weakening our nation.

Musharraf: I won't tell you exactly because then you will ask me for evidence. I can only tell you that India, for example, has 16 insurgencies going on and nobody is making a big thing out of it. But the West always focuses on Pakistan as the problem.

Musharraf: I am totally against the term AfPak. I do not support the word itself for two reasons: First, the strategy puts Pakistan on the same level as Afghanistan. We are not. Afghanistan has no government and the country is completely destabilized. Pakistan is not. Second, and this is much more important, is that there is an Indian element in the whole game. We have the Kashmir struggle, without which extremist elements like Lashkar-e-Taiba would not exist.

SPIEGEL: Is Pakistan now paying for its earlier failures? Why didn't you eliminate the Taliban leadership when they came to Pakistan at the end of 2001 -- above all the so-called Quetta Shura, the Taliban's highest decision-making council, in the Pakistani city Quetta? Musharraf: The Quetta Shura never existed. Do you really think there is an assembly in a kind of a house where they come and discuss things in something like a regular consultation? Mullah Omar never was in Pakistan and he would be mad if he appeared there. He is much safer in Afghanistan.

SPIEGEL: Over the last eight years, Pakistan has received about $10 billion in military aid from the US. Apparently you didn't spend all that money on the war on terror -- some went to secure your eastern border with India. Is that true? Musharraf: Half of it, $5 billion, was reimbursed to us for services we had already rendered to the US. You have to understand how the Pakistan army operates: The divisions keep moving. If we buy new tanks for $250 million, then they will be deployed in Peshawar as part of the war on terror, but they will also go to the eastern border. But why do you care about that? Why, for heaven's sake, should I tell you how we spent the money? SPIEGEL: The American government would surely be interested in knowing. Musharraf: I also told the Americans that it has nothing to do with them. We are not obligated to give out any details. Maybe I should have said at the time: Ok, you want us to support you, give us $20 billion a year and don't ask what we are doing with it.

Musharraf: I do agree, they do not accept this war as their war. This has something to do with history. Please understand the reason, and you should blame the US for it. From 1979 to 1989, we fought a war with the US in Afghanistan against the Soviet Union. And we won mainly because of ISI. Otherwise, the Soviet Union could not have been defeated in Afghanistan. But then the US left us all alone with 30,000 mujahedeen brought by them. Even Osama bin Laden was brought by the US, who else? They all came to fight the Soviet Union. So, did anybody in Washington develop a strategy for what to do with these people after 1989? No, nobody helped Pakistan for the next 12 years until 2001. We were left high and dry, with 30,000 mujahedeen holed up, no rehabilitation, no resettlement for them. No assistance was given to Pakistan -- instead sanctions were imposed against us. Fourty F-16s, for which we had paid money, were denied to us. Four million Afghan refugees had also come to Pakistan. The mujahedeed coalesced into al-Qaida and our social fabric was being completely destroyed. This is why the people of Pakistan felt used by the Americans, and this is why Pakistanis dislike the US and this war.

It was only a few years ago that Husain Haqqani, a former Pakistani diplomat who recently became ambassador to Washington, wrote a brilliant book arguing that the Pakistani government—despite public and private claims to the contrary—continued "to make a distinction between 'terrorists' … and 'freedom fighters' (the officially preferred label … for Kashmiri militants)." He added: "The Musharraf government also remains tolerant of remnants of Afghanistan's Taliban regime, hoping to use them in resuscitating Pakistan's influence in Afghanistan." The Pakistani military's world view—that it is surrounded by dangers and needs to be active in destabilizing its neighbors— remains central to Pakistan's basic strategy.

While President Musharraf broke with the overt and large-scale support that the military provides to the militant groups, and there have continued to be some moves against some jihadists, there is no evidence of a campaign to rid Pakistan of these groups. The leaders of the Afghan Taliban, headed up by Mullah Mohammed Omar, still work actively out of Quetta. The Army has never launched serious campaigns against the main Taliban-allied groups led by Gulbuddin Hekmatyar or Jalaluddin Haqqani, both of whose networks are active in Pakistan. The group responsible for the Mumbai attacks, Lashkar-e-Taiba, has evaded any punishment, morphing in name and form but still operating in plain sight in Lahore. Even now, after allowing the Taliban to get within 60 miles of the capital, the Pakistani military has deployed only a few thousand troops to confront them, leaving the bulk of its million-man Army in the east, presumably in case India suddenly invades.

The rise of Islamic militants in Pakistan is not, Ambassador Haqqani writes, "the inadvertent outcome of some governments." It is "rooted in history and [is] a consistent policy of the Pakistani state." The author describes how, from its early years, the Pakistani military developed "a strategic commitment to jihadi ideology." It used Islam to mobilize the country and Army in every conflict with India. A textbook case was the 1965 war, when Pakistan's state-controlled media "generated a frenzy of jihad," complete with stories of heroic suicide missions, martyrdom and divine help.

In December 2007, the smattering of bearded, black-turbaned, AK-47-toting gangs in FATA and NWFP announced that they would now answer to a single name, Tehrik-e-Taliban Pakistan (TTP), or Pakistani Taliban Movement. For decades, Pakistani jihadists have used such fancy names to declare splinter groups (many of which go unnoticed), but some analysts latched onto the TTP as gospel and postulated that, overnight, the Talibs had become disciplined and united. In the process, such analysts have overlooked important distinctions and divisions within the pro-Taliban groups operating in Pakistan.

n 1996, Mullah Mohammed Omar and his band of “Taliban” -- defined in Urdu, Pashto, and Arabic as “students” or “seekers” -- conquered Afghanistan.

Pashtuns ignore the border separating Afghanistan and Pakistan, named the Durand Line after the Englishman who drew it in 1893; the Pashtun “nation” encompasses wherever Pashtuns may live. Fighting the Americans, therefore, was seen as self-defense, even for the residents of FATA.