Amid rising deaths, political setbacks, financial problems, competing local interests and a looming withdrawal deadline, Afghanistan has become a formidable challenge for AmericaThe pursuit of a settlement in Afghanistan has become a formidable political and financial challenge for the United States. A growing number of casualties, continued political setbacks on the reconciliation front, and condemnation of the way the establishment has thrown American tax-payers’ dollars into the war economy fly in the face of the lofty rhetoric on the 2014 pullout deadline, and shows US President Barack Obama’s predicaments ahead of his reelection bid in November.

A recent US report declared the concept behind reconstruction projects in Afghanistan as “fundamentally flawed”, and concluded that by pouring money into Afghan aid, the US may have created a culture of entitlement

Let us consider the following. On August 10, an Afghan police commander killed three US soldiers in an attack in the southern province of Helmand and fled.

An ISAF spokesman, General Gunter Katz, told media on August 13 that about 37 foreign soldiers were killed in 27 attacks by Afghan forces this year – over 30 percent in terms of US-ISAF casualties across Afghanistan, not just in the south and east, since early this year. This is alarming for all those NATO countries who are anxiously gearing up for the mass withdrawal in about two years from now.

The American media had earlier quoted the ISAF commander General John Allen as saying in May that about half of the green-on-blue attacks have been carried out by Taliban infiltrators.

Only days before, a quarterly report released by the Special Inspector General for Afghanistan Reconstruction had expressed concerns about the roughly $90 billion spent in Afghanistan in the last decade or so.

About 37 foreign troops were killed in attacks by Afghan forces this year. That accounts for about 30 percent of total NATO deaths

The agency also investigated and found that programmes funded by the Department of Defence’s Afghanistan Infrastructure Fund, were so far behind schedule that results may not be visible until after the US troops have left the country.

The report declared the concept behind the reconstruction projects as “fundamentally flawed”, and concluded that by pouring money into Afghan aid, the US may have created a culture of entitlement.

This report also underlines the Afghan government’s financial limitations in covering the salaries and operating costs of the Afghan National Army (ANA) and the Afghan National Police till 2024, which currently stand at a combined strength of 352,000. According to NATO estimates, Kabul would require over $4.1 billion a year to maintain this force. But the Afghan government, the report points out, lacks funds even if this force were revised downwards to 228,500 by 2017.

Viewed against these disconcerting facts, the US administration faces the challenge of how to extricate itself from the quagmire that is defined also by competing interests of Afghanistan, Pakistan, Iran, India and the United States itself. Although the geo-political considerations discount a total US withdrawal from Afghanistan, it still must scale down military presence to a financially sustainable level. That requires synchronization of thought and action in the region – a phenomenon currently seemingly restricted to lip-service only as the CIA pursues its own track of talks and clandestine operations in and around Afghanistan.

The Huffington Post recently reported on the role of six CIA-trained clandestine militias that operate near the cities of Kandahar, Kabul, and Jalalabad as well as in Khost, Kunar, and Paktika provinces. “These counter-terror Pursuit Teams evidently operate free of any Afghan governmental supervision and have reportedly carried out cross-border raids into Pakistan, offering their American patrons a classic benefit of proxy warfare: plausible deniability,” the report said.

Pakistani Prime Minister Raja Pervaiz Ashraf’s July 19 visit to Kabul was marred by mutual allegations on what Pakistan calls “reverse infiltration” from Afghanistan, and Pakistan’s reluctance to launch a full-scale military operation in North Waziristan. The Pakistani delegation went with the proposal of a Strategic Partnership Agreement (SPA) with Afghanistan, but after the bitterness over cross-border strikes by Mullah Fazlullah’s terrorist group, the offer was withheld.

Secondly, the Pentagon-guided Afghan government is still reluctant provide a written “list of expectations of Pakistan” which obviously holds back Islamabad from a pro-active position on the reconciliation process. Gen Kayani’s August 14 statement (no compromise or action under pressure) also ties into the Pakistani attempts to resist the American pressure for an all-out action in North Waziristan.

Thirdly, while being ambivalent on their endgame in Afghanistan, the Americans also continue to deny Iran any role in the process. At the same time, they expect Pakistan to go after the Haqqanis and Al Qaeda in North Waziristan. The obvious goal: Pentagon wants to flag victories at home for President Obama before the presidential elections. President Obama signed into law the Haqqani Network Terrorist Designation Act of 2012 on August 10.

Under the law, the secretary of state will have one month to report on whether the Haqqani Network should be categorized as a terrorist organization. This is a major step for the US in the desired direction – a military operation in North Waziristan.

The inherent risks for Pakistan mean more pressure and possible sanctions (under the pretext of abetment of a designated terrorist network). This means – theoretically – treating Iran and Pakistan with the same stick. The question is, will the US eventually browbeat Pakistan into action, without the US and Afghan forces sealing the Afghan side of the border?

Imtiaz Gul is the Executive Director of the independent Centre for Research and Security Studies, and the author of the forthcoming book Pakistan: Before and After, Roli Books, India