Reporter's fate may jolt US-Pakistan antiterror alliance

Just a day after saying that kidnapped reporter Daniel Pearl was alive, chief kidnapping suspect Ahmed Omar Saeed Sheikh told a crowded courtroom that he believed the Wall Street Journal correspondent was dead.

It was just the latest jolt in the emotional rollercoaster of this 25-day case, and appeared to be aimed at discrediting Pakistani President Gen. Pervez Musharraf, who has become a key ally for America's war on terrorism.

Speaking in the antiterrorism court in Karachi, Mr. Sheikh told the judge, "Our country should not be catering to the needs of America." Sheikh also confessed to kidnapping Mr. Pearl, but said, "As far as I understand, he is dead."

Pakistani police say they believe Sheikh is "playing games" with investigators, and they will continue to assume that Pearl is still alive. Pearl disappeared in the turbulent port city of Karachi on Jan. 23, while reporting a story on links between Islamic militant groups and the foiled British shoe bomber Richard Reid.

Sheikh's latest revelation couldn't have come at a worse time for President Musharraf, who wound up a three-day visit to Washington on Thursday. During his trip, Musharraf used his new credentials as a key ally in America's war on terrorism to appeal for relief for Pakistan's $3 billion debt, along with funding for military and domestic programs. Yet the kidnapping of Pearl has presented a challenge to Musharraf's promise to rein in terrorist groups on Pakistani soil.

"This guy is trying to use a courtroom to send a message across the news media," says Rifaat Hussein, a political scientist at Quaid-I-Azam University in Islamabad. "But one should not be under the impression that Musharraf has lost control of the state apparatus. On the contrary, the state apparatus has gone out of its way to bring the kidnappers to the book. If anything it suggests something about the effectiveness of the apparatus."

US officials have been quick to praise the Musharraf government for its continued cooperation in tracking down militant groups linked to Al Qaeda.

In return, Musharraf has won President Bush's assurance that the US would not be "walking away from Pakistan" as it had in the early 1990s, as Soviet troops withdrew from Afghanistan. Mr. Bush even buoyed Pakistan's hopes of resolving its 54-year dispute with India over the state of Jammu and Kashmir.

Even so, it is clear that not all members of Pakistani law enforcement or intelligence agencies are fully behind Musharraf's pro-American policies. Police sources say that among other accused kidnappers awaiting prosecution are a Pakistani police constable and two retired members of Pakistan's Inter-Services Intelligence agency. But Tasneem Noorani, a spokesman for Pakistan's Interior Ministry, denied any linkage between the ISI and the kidnappers.

The possible involvement of Pakistan's ultrasecret ISI, in particular, raises concerns here and in Washington. The ISI once maintained close contact with and provided logistical support for the Kashmiri militant that have been waging a 13-year insurgency in the Indian state of Kashmir. These groups include Harkat ul Mujahideen and Jaish-e-Muhammad, which trained at Al Qaeda-run camps in Afghanistan. As a member of Harkat ul Mujahideen, Sheikh was arrested for kidnapping foreign tourists in Kashmir in 1994. Officially, ISI severed its ties to these groups in January, and the groups themselves have been shut down.

Yet while a few rogue ISI agents may continue to cooperate with militant groups, most Pakistani observers say there are no signs of a full-scale rebellion within military or intelligence ranks.

"We are talking about three people who may be involved, we don't know," says Dr. Hussain. "It is always possible for someone to turn mercenary for a $100, given how low a police constable's salary is."

For now, Pakistani police say they will continue to question Sheikh in Karachi, saying he's "a hard nut to crack." And they may continue to pressure Sheikh's family as well. Asked why he had turned himself in to police in the eastern city of Lahore on Tuesday, Sheikh said, "I gave myself in to save my family and friends."

Pearl's pregnant wife Marianne, and his employer, The Wall Street Journal, say they remain confident that Pearl is still alive and that he will be found.

"We continue to remain hopeful," said Steven Goldstein, spokesman for Dow Jones & Co., the owner of the Wall Street Journal. "We remain confident that Danny is still alive."