WASHINGTON -- The CIA believes Osama bin Laden is still in Pakistan, and the spy agency is hoping to close in on him as that country's military cracks down on the northwestern tribal area where he is thought to be hiding.
"I guess one of our hopes is that as Pakistani military moves in, combined with our operations, we may have a better chance to get at him," Panetta said.
The CIA has increased the number of officers and recruited agents, or locals who provide information, in Pakistan, Panetta said.
"We have a number of people who are on the ground in Pakistan who are helping us provide targets and who are helping us provide the information that we really need to go after al-Qaida," he said.
He said the Pakistani offensive in the Swat Valley is making very good progress compared to Pakistan's past efforts to crack down on extremists. The Pakistan military says it has killed more than 1,300 militants during the offensive and reclaimed most of the region.
Past offensives against Islamist militants often faltered, with the government choosing to strike peace agreements with the extremists. A peace deal in Swat collapsed in April after the Taliban advanced from there into nearby Buner, just 60 miles from the capital, Islamabad.
Panetta said the CIA is mindful that as it makes progress in Pakistan, al-Qaida leaders could transfer their sights to safe havens elsewhere, such as Yemen and Somalia, which have large ungoverned territories.
Panetta also hinted that the Obama administration is crafting a new approach to confront both North Korea's and Iran's nuclear program.
"The approach that we take to deal with North Korean nuclear development will send a very important signal to Iran in how we deal with them," Panetta said after a speech to the National Italian American Foundation.
He declined to provide details.
North Korea conducted its second underground nuclear test in May. The blast came less than two months after the North fired an intermediate-range rocket over Japan and into the Pacific Ocean. Though North Korea claimed it launched a satellite into space, the U.S. and other countries believe it was meant to test ballistic missile technology.
Iran is reported to be developing the fissile material and missile to fuel and launch a nuclear warhead, but has not yet detonated an atomic bomb. It launched a small satellite into space earlier this year, making progress on technology that could be applies to an intercontinental ballistic missile.
The CIA is closely monitoring the Iranian presidential election to take place Friday. Panetta said current President Mahmoud Ahmadinejad still has the edge, especially in rural areas, and is favored by Iran's religious ruler, but other candidates appear to be gaining ground after a public debate.
"We're sensing now there is some momentum for opposing candidates," he said.
Panetta also said the CIA will spend nearly $250 million in the next five years to double the number of intelligence officers that are proficient in a foreign language. Less than a third of CIA analysts and overseas spies are proficient in a foreign language, according to the agency.