Pakistan has a new strategy for fighting al-Qaida and Taliban militancy on its lawless border with Afghanistan: peace. After three years of battles, the army has reached a truce with militants in North Waziristan. But that's only stoked fears that Islamic extremists will have a freer run than ever along the rugged frontier where Osama bin Laden could be hiding.

Some see the truce, brokered by tribal leaders, as a humiliating defeat for Pakistan's president, Gen. Pervez Musharraf, who is a key U.S. ally in the war on terrorists.

In December 2001, Musharraf sent the army into semiautonomous tribal regions along the Afghan border for the first time since the founding of Pakistan in 1947, aiming to root out al-Qaida militants fleeing Afghanistan after the fall of the Taliban regime.

That sparked heavy fighting in Pakistan itself, killing hundreds of militants, soldiers and civilians, and fueling a burning resentment among local Pashtun tribesmen. Pro-Taliban clerics have gained sway and even called for"jihad,"or holy war, against Pakistan's army.

The truce is"recognition of previous military policies not being successful,"Patrick Cronin, a South Asia expert at the International Institute of Strategic Studies in London, said by phone.

Musharraf himself has said as much. But the key question is whether the cure will aggravate the disease.

Cronin said that North Waziristan is already"a haven for terrorists,"and that the wait-and-see approachof Afghanistan, the U.S. and their allies toward the peace deal could be dangerous.

"A month here, a month there is all you need to plan very horrendous attacks,"he said."Everybody assumes terrorists are operating out of there. They seem to have been given a green light."

But Pakistan's security forces, which suffered 375 dead and 1,039 wounded since the army moved into the tribal areas, were bogged down in a virtually unwinnable fight to wipe out militants.

While attacking police and troops nearly every day, militants executed dozens of pro-government tribal elders and informants, often displaying their beheaded bodies as a warning to others.

Extremist clerics gained prominence and tried to enforce a Taliban-style fundamentalism. They sometimes burned shops that sold videos and CDs they deemed un-Islamic, threatened men without beards, and even dispensed justice, undermining the sway of the national government.

In late June, the militants unilaterally declared a cease-fire, and at the government's urging, 45 elders from across the tribal regions began a council in July to seek a settlement between the government and militants. They reached their deal last week.

Among the truce's provisions, militants agreed to stop attacking Afghan and U.S.-led coalition forces in eastern Afghanistan. A U.S. military spokesman in Kabul, Col. Tom Collins, said that border infiltration still happens"just about every day."

He said it was too early to judge the deal's results, but he voiced some skepticism.

"We have to always remember who we're dealing with here,"Collins said of the militants."These are not necessarily people who live by their word or do what they say."

A senior Pakistani official said that under the peace deal, the army is withdrawing from checkpoints in towns, but"will not pull back a single soldier from the border."The army can also still launch"surgical"counterterrorism operations.

But the official, who agreed to discuss the truce only if not quoted by name because he is involved in state security, conceded that unarmed tribesmen would still be at liberty to cross the long, rugged frontier and could pick up weapons on the Afghan side.

"We are responsible for anything that happens in Pakistan. If there's an arms depot in Afghanistan, it's not our responsibility,"the official said.

The architect of the plan, Ali Mohammed Jan Aurakzai, a retired general and now governor of North West Frontier Province, said the Pakistani government would rely partly on the region's tribal leaders to do their own policing.

He said their motivation for upholding the agreement would be the return of peace and government promises of medical facilities, schools and roads in an isolated region where about 90 percent of the people live in poverty.

There are already good signs in North Waziristan's main town, Miran Shah. Restrictions on transportation that hampered trade have eased, and markets are doing better business.

Children's attendance at one village school is up 70 percent."Children would not come to school because of the frequent fighting. But now they are happy at school,"said teacher Wazir Khan.

Fighting had wracked the border region since the army launched a series of major operations in 2003 in South Waziristan that destroyed some al-Qaida sanctuaries and killed or disrupted hundreds of Arab, Afghan and Central Asian militants.

But militants fled to North Waziristan, where the army found it harder to root them out. When the crackdown led to increasing civilian deaths, local resistance escalated. A burst of fighting in the first half of 2006 killed nearly 500 people, undermining the already fragile hold of the government.

Talat Masood, a defense analyst and former Pakistani army general, said it would take at least six months to see if the truce is effective, or whether militants use it to consolidate their positions.

"They should not be allowed to exploit the peace,"he said.

One of the main points of contention in negotiations is the presence of foreigners in the area. Under the agreement, they can now stay, if they live peacefully. Previously, the government had demanded foreigners leave or surrender to authorities.

But the government security official stressed that the truce isn't a general amnesty. Hundreds of Taliban, al-Qaida and others sought as terror suspects by Afghanistan, Pakistan and the United States could still be arrested. Among them: bin Laden.

Associated Press writer Bashirullah Khan in Miran Shah contributed to this report.

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