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Pakistani generals routinely deny that their army retains any sympathy for the Taliban. But here is a secret they managed to keep quiet for several months. In early summer U.S. soldiers scrambling after Taliban remnants along the craggy mountains of southeastern Afghanistan made a surprising discovery. Among the gang of suspected Taliban agents they nabbed were three men who, it emerged in interrogations, were Pakistani army officers. Authorities in Pakistan clapped the three in a military brig; an official from military intelligence called them "mavericks." But the news of their capture alongside enemy fighters underscored a persistent issue in Washington and Kabul: Whose side, exactly, is Pakistan on?

The longer the war on terrorism continues, the more questions the U.S. seems to have about Pakistan. Just how devoted is President Pervez Musharraf to fighting terrorism? Is Pakistan undermining stability in neighboring Afghanistan? Is it flirting with the potential disaster of a new war on the subcontinent by harboring militants fighting India in the disputed region of Kashmir? What role does Islamabad play in the proliferation of nuclear weapons worldwide? On so many issues of U.S. concern, Pakistan is a crucial nexus.

Certainly Washington continues to appreciate Musharraf's decision to side with the U.S. after 9/11. That meant breaking ties with the Taliban, which Pakistani authorities had nurtured; assisting the U.S. in changing the regime in Afghanistan and in running down remnants of Osama bin Laden's al-Qaeda as they fled their sanctuary there; and restraining Islamic extremists in Pakistan. Says a U.S. official of the Pakistanis: "We're certainly better off with the level of partnership we have with them than if we had none."

But the faintness of that praise contains at least a hint of disappointment. No one expected Musharraf to reorient Pakistan toward moderation instantaneously. Even if his security chiefs saluted his new orders, rogue operations were inevitable. Plus, Musharraf has to balance Washington's demands against the fact that many Pakistanis are sympathetic to the Taliban and al-Qaeda and particularly to the militants in Kashmir. For those reasons, the Bush Administration has settled on what a State Department official calls "the carrot approach with Pakistan." In his scheduled meeting with George W. Bush in New York City this week, the fifth session Musharraf has had with the President since 9/11, he can expect a continuation of that policy. But he will also feel an urgency in the air. It's sparked by Washington's concern that it needs better results from Islamabad at a time when a resurgent Taliban is using Pakistan as a base for strikes against U.S. and government forces in Afghanistan, threatening the stability of the U.S.-backed government in Kabul. Says Norbert Van Heyst, the outgoing commander of the nato peacekeeping force in Kabul: "It is well known that beyond the border, the remnants of the Taliban and al-Qaeda have the chance to reorganize," including establishing training camps.

One reason the Pakistanis have failed to stop these militants is geographical. The border area in Pakistan where Taliban and al-Qaeda survivors have coalesced is made up of semiautonomous tribal lands where the central government's authority is limited and where promilitant fervor runs high. In early September U.S. soldiers backed by helicopters and fighter aircraft herded dozens of fleeing Taliban fighters out of the mountains in Afghanistan's Zabul province toward the border, while Pakistani forces waited to grab them as they came across. By the third day, tribal protests had become so widespread that Islamabad called off the hunt. Not one Taliban fighter was captured.

Islamabad, meanwhile, is resisting U.S. demands that its forces be allowed to mount their own search parties inside the tribal territories. That scenario, explains a Pakistani military officer, could lead to an armed tribal uprising. "You get these hotshot cia guys who come in on a six-month rotation, and they want to tear up everything—mosques, villages—to get bin Laden," a Western diplomat comments. "Well, the Pakistani army has to live with the fallout."

And within the army, there seem to be strains of resistance to the U.S.-led effort against al-Qaeda and its allies. Pakistani military-intelligence sources say army investigators in early September arrested three officers, all "below the rank of lieutenant colonel," for suspected ties to al-Qaeda. Two of the officers were based in the tribal areas. All three, say the sources, were fingered by al-Qaeda's top planner, Khalid Sheikh Mohammed. They are in Pakistani military custody.

Thought to be the mastermind of the 9/11 attacks, Mohammed was caught last March inside an army officers' colony in Rawalpindi. Authorities say he was sheltered there by a serving army major. A senior military-intelligence official denies that al-Qaeda has any support in the military beyond this "tiny cell." But according to Talat Masood, a retired lieutenant general and a writer on security issues, a strong anti-U.S. feeling pervades the army. After Musharraf's government turned against the Taliban at Washington's prodding and failed to condemn the civilian casualties in the war in Afghanistan, says Masood, "there was a sense of betrayal inside the armed forces."

Weeding out extremists in the military may not be easy. For years, the top brass drummed into midranking officers a sense of Islamic mission. A Prophet-length beard helped an officer's promotion, as did praying five times a day. Now, says Masood, "the army is taking measures against officers who are too religious minded." Those deemed overly fanatic are discreetly steered into nonsensitive or dead-end jobs, he says, and a soldier needs permission from his commanding officer before he is permitted to grow a beard.

The difficulty of redirecting the army toward moderation is illustrated by Musharraf's struggle to reform Pakistan's powerful internal-security apparatus, Inter-Services Intelligence (isi], once the Taliban's No. 1 ally. These days, says a Western diplomat in Islamabad, the isi's top brass carries out Musharraf's bidding, but some of the lower-echelon officers seem to retain ties—ideological and financial—with their former Taliban proteges. Says this diplomat: "At some level, these guys see the Taliban as an insurance policy for what happens next in Afghanistan."

These same countervailing forces are at play in Islamabad's relations with militants fighting to expel India from the part of Muslim-majority Kashmir that it occupies. The militants' cause is popular within the Pakistani security forces and among Pakistanis in general. After India and Pakistan, both nuclear armed, nearly went to war over the conflict in May 2002, Musharraf assured Bush that there were no militant training camps in Pakistani territory. Deputy Secretary of State Richard Armitage reminded Musharraf of that guarantee when the two met in the northern city of Rawalpindi before Musharraf's last meeting with Bush in June. Armitage then produced a dossier of satellite photos showing camps of that nature. "Musharraf acted outraged and upset," a State Department official tells TIME, but it wasn't clear to the Americans whether he was angry that the camps were functioning or that the U.S. had uncovered them.

Musharraf has failed to sustain his promise to crack down on extremist groups that in the past fed fighters to the Kashmir cause, carried out sectarian killings and attacked Westerners. In January 2002, at the insistence of the U.S., Musharraf banned five such groups. Yet the government has allowed them to resurface under new names. Abdul Rauf Azhar, formerly of Jaish-e-Muhammad, says, "We are still doing our work."

Azhar is not just any militant. Indian police suspect him of organizing the 1999 hijacking of an Indian Airlines flight to secure the release of his brother Maulana Masood Azhar, among other prisoners, from an Indian jail. The two Azhar brothers top India's wanted-terrorist list, but Pakistan brought no charges against Abdul Rauf. Musharraf did vow to keep Masood under house arrest, but staff members at his ornate mansion in Bahawalpur say he is free to travel, give incendiary sermons against the U.S. and collect donations for the Kashmiri insurgency.

Ultimately, the most explosive issue between the U.S. and Pakistan is the nuclear one. American intelligence officials believe Pakistani scientists have shared—with North Korea and Iran—the technology they developed on their way to becoming a nuclear power. That is a possibility Washington cannot ignore when North Korea is explicitly threatening to sell nuclear weapons to terrorists unless the U.S. gives in to Pyongyang's demands for security guarantees, diplomatic ties and economic aid. U.S. officials do not think government agents are responsible for the leakage of Pakistani technology, but the U.S. has repeatedly asked Pakistan to impose tighter export controls and remains unsatisfied with Islamabad's response.

Of course, Musharraf has his frustrations with Washington. Like many Pakistanis, he thinks the U.S. has not sufficiently compensated Islamabad for its sacrifices in the war on terrorism. Several dozen Pakistani security men have died in shoot-outs with al-Qaeda since 9/11, and two were accidentally shot last month by U.S. troops. Among the rewards Islamabad seeks are for the U.S. to unblock the sale of F-16 fighter planes to Pakistan, open U.S. markets to Pakistani textiles and apply more pressure on New Delhi to settle the Kashmir dispute. "Here we are, fighting and dying in Bush's war," a Pakistani general recently told a Western diplomat, "and we're not getting anything in return."

When Musharraf and Bush met in June, the President's message to the Pakistanis was, according to a State Department official, "If they really are committed (to fighting terrorism], we're willing to entertain any request they want to make." Ahead of this week's meeting, U.S. officials anticipated that Musharraf would arrive with a wish list of military, economic and trade concessions and a rundown of what he would do on the counterterrorism front if granted those benefits. "Then people will decide what the pain thresholds are," says the official. Those limits will be determined in part by the ache of the intolerable status quo.

—With reporting by Timothy J. Burger/ Washington, Ghulam Hasnain/ Bahawalpur and Syed Talat Hussain/Islamabad

• Tim McGirk I Islamabad and Massimo Calabresi I Washington