Things went wrong from the start. The al-Qaeda men showed up for the ride with AK-47s and grenades bulging under their tribal robes. They refused to allow Niazi to ride shotgun up front, where he had a chance to escape, but wedged him between two Uzbeks in the back. As the van neared the checkpoint where the ambush awaited, Niazi started to sweat. The police roadblock was hidden by a rocky hill, and when the driver took the curve, he had to slam hard on the brakes. About 70 cops were hidden behind large boulders on one side of the road and among the tombstones of a shady cemetery on the other. When a Pakistani officer approached the van and ordered the driver to get out, the al-Qaeda man in the front seat stuck a gun in his ribs. As the driver tried to leap out of the van, the al-Qaeda fighter shot him. In response, all 70 cops opened fire. Two of the Uzbeks hurled grenades and tried to make a run for the boulders, but were cut down by police bullets. Pinned in the cross fire, Niazi never made it out of the backseat.
The deadly highway shoot-out was just one of many troubling signs that al-Qaeda has found a new home—in Pakistan. While the U.S. and coalition forces continue to squeeze al-Qaeda inside Afghanistan, thousands of militants have slipped across the border since last winter. Officials estimate that, altogether, more than 3,500 al-Qaeda operatives and their Pakistani comrades are hunkered down in the tribal belt along the Afghan border and in the sprawling cities of Karachi and Peshawar, sheltered by homegrown extremists. Since December, Pakistani authorities working with U.S. intelligence agents have caught more than 380 suspected al-Qaeda members. In Peshawar last week, U.S. and Pakistani officials detained seven suspected terrorists but failed to snatch two senior al-Qaeda aides who were the main targets of the raids.
For months U.S. and Afghan officials have speculated that bin Laden has sought refuge over the border, though Pakistani intelligence officers tell Time that the al-Qaeda boss was last definitely seen on Nov. 17 in a 25-vehicle convoy, heading from Jalalabad into Afghanistan's Tora Bora mountains. Since then, the Pakistanis say, there have been no credible sightings. But thousands of al-Qaeda fighters did cross into Pakistan in two waves. According to Pakistani intelligence officials, the first exodus came in November, when al-Qaeda fled into the remote Tirah Valley to escape the U.S. bombardment of Tora Bora. The second wave entered last March, during the allied forces' Operation Anaconda against al-Qaeda positions in Afghanistan's eastern Shah-i-Kot mountains.
Some were just passing through, en route to Indonesia, Yemen and the Arabian Gulf. According to diplomats, a few al-Qaeda fugitives may have been given money and transport to get out of Pakistan by sympathetic staff at an Arab consulate in Karachi. Bangladeshi intelligence sources say that in the same month, a Saudi-owned vessel smuggled 150 al-Qaeda and Taliban out of Karachi to the Bangladeshi port of Chittagong. But most of the terrorists stayed in Pakistan. Many of them, especially the non-Arab Uzbeks, Chechens and Sudanese, operate like bandits in the tribal areas, where they raid U.S. outposts across the border. The militants have fiercely resisted Pakistani efforts to arrest them. On June 25, several hundred Pakistani paramilitaries raided a mud-walled fortress in the mountains of South Waziristan, a rifle-shot away from the Afghan border. According to a Pakistani intelligence source, they had help from several CIA operatives, who picked out the al-Qaeda refuge with satellite photos and electronic eavesdropping. The Uzbek fugitives had heavy machine guns and an arsenal of rocket-propelled grenades piled up on the ramparts, but they held their fire for close to an hour, until a group of Pakistani soldiers smashed the gate and walked into the courtyard. Snipers promptly raked the soldiers with machine-gun fire. About three hours later, a militant inside the fort yelled out that they were ready to surrender. It was a ruse: as soon as the al-Qaeda fighters, dressed in commando gear, began filing out, they opened fire on the soldiers and scattered across the orchards into the darkness. Two al-Qaeda men were killed, but an additional 35 escaped and are thought to be still roaming the tribal area. "When cornered, these people fight to the death," says a Pakistani intelligence officer. "They don't want to end up in Guantanamo."
Hundreds of al-Qaeda terrorists of Arab nationality, richer and better at blending in, have vanished into Karachi, the megacity of 12 million on the Arabian Sea. Diplomats say that the al-Qaeda fugitives who reached Karachi late last year "were not living in slum areas," but preferred high-rent districts where money buys high-walled privacy. Some were believed to have hidden in posh safe houses for much of the winter. But since then, they have scattered again. Says a senior Pakistani official: "They don't like to keep in one place. They're in lower-class neighborhoods, middle class, everywhere." Karachi authorities say that raids of militants' hideouts and homes in recent weeks have uncovered huge stashes of Kalashnikovs, rockets and ingredients for bombs.
Pakistani intelligence officials believe al-Qaeda is attempting to regroup by linking up with Pakistani graduates from Afghan terrorist training camps who came home to continue their lethal struggle. Officials think al-Qaeda is now contracting out terror assignments to Pakistani militant groups, especially the banned extremist groups Lashkar-e-Jhangvi and Jaish-e-Muhammad. "These are branch offices. They are using Pakistanis as servants," says a Pakistani terrorism expert.
Karachi police chief Syed Kamal Shah told Time that investigators believe the kidnapping and murder of U.S. journalist Daniel Pearl was coordinated by "foreigners"—a standard code word for al-Qaeda. Pakistani investigators say al-Qaeda's fingerprints are hard to detect, but their hunch is that bin Laden's network was behind the May attack that killed 11 French technicians riding through Karachi on a bus and the June bombing of the U.S. consulate in Karachi that killed 12 Pakistanis.
Now U.S. and Pakistani authorities have begun to unravel a web of connections between the perpetrators of those attacks and the militants involved in the Pearl murder. Last Monday a Hyderabad court ordered the death penalty for Ahmad Omar Saeed Sheikh, a British-educated Islamic militant, and sentenced three accomplices to life in prison for their role in the American journalist's murder. Police have since detained new suspects, who likely will also be tried for Pearl's murder. One of the suspects, Fazal Karim, has allegedly confessed to beheading Pearl at a farmhouse on the outskirts of Karachi, although he has not been formally charged. Through wiretaps and the FBI's growing ring of informants ("Money talks," grins a Pakistani official), investigators have tracked communications between Karim and two suspects arrested on July 8 for attempting to kill Pakistani President Pervez Musharraf last April. The two accused, Mohammed Imran and Mohammed Hanif, confessed they parked a pickup truck loaded with explosives along Musharraf's motorcade route through Karachi. The remote-control detonator failed. Then eight weeks later, the same explosive-rigged vehicle was used in the blast at the U.S. consulate.
Pakistani intelligence officials believe these bombers and Pearl's killers were carrying out the attacks as part of a broader strategy of terror that has the signature of bin Laden's network. "These terrorists are smart. They had fire walls between the different cells, so that if anyone got caught, the trail would stop there," says an investigator. "Some people provided them with money, the equipment and a plan. And we think those people are connected to al-Qaeda."
Bin Laden's network is far from finished. As an extremist detained by Pakistani authorities recently told his interrogators, "Al-Qaeda is nowhere, and it is everywhere. If Americans are after us, we are after them." That chilling threat is what makes the hunt for al-Qaeda's latest Pakistan hideouts so urgent.