Mansoor Ijaz, the main figure in the "Memogate" scandal that is rocking the highest levels of the Pakistani political establishment, told his U.S. go-between Gen. Jim Jones in a private e-mail that there were three people who "prepared" the now-infamous memo, not just former Pakistani Ambassador to Washington Husain Haqqani.

Ijaz is set to travel to Islamabad next week to testify before the Supreme Court of Pakistan's inquiry commission on the memo, which he delivered through Jones to then Joint Chiefs Chairman Adm. Mike Mullen last May. Ijaz has repeatedly claimed the memo was authored solely by Haqqani on behalf of Pakistani President Asif Ali Zardari. The memo offered to replace Pakistan's military and intelligence leadership and reorient Pakistani foreign policy in exchange for U.S. government help to prevent a purported impending military coup in the wake of the killing of Osama bin Laden.

Haqqani resigned over the scandal and is now living under virtual house arrest on Gilani's compound, but he has always denied being the author of the memo. Now, in the previously unreported May 9 e-mail from Ijaz to Jones that accompanied the memo, obtained by The Cable, Ijaz told Jones the document was prepared by three people, not just Haqqani.

"In further reference to our telephone discussions on Pakistan and its relations with the United States, I am attaching herewith a document that has been prepared by senior active and former Pakistan government officials, some of whom served at the highest levels of the military-intelligence directorates in recent years, and as senior political officers of the civilian government," Ijaz wrote to Jones only 8 days after bin Laden was found hiding in the military town of Abbotabad.

Last month, Ijaz handed over the e-mail to the Supreme Court's Registrar Faqir Hussain in advance of Ijaz's testimony next week. Ijaz told Jones in the e-mail that the memo "has the support of the President of Pakistan," but Ijaz didn't mention in the e-mail that Haqqani was involved in the memo or the scheme in any way.

"I personally know two of the three men," Ijaz wrote to Jones, referring to the three men who allegedly prepared the document. "I believe they are men of honor and integrity, although they have been away from the games played in Islamabad for some time."

"Thanks for standing up with me on this," wrote Ijaz. "I don't know if it will work, but we have to try."

Jones replied May 11 "Message delivered," referring to the fact he had passed the memo on to Mullen.

In an Oct. 10 Financial Times op-ed where he revealed the existence of the memo, Ijaz wrote that the scheme was devised by "a senior Pakistani diplomat" whom Ijaz later alleged was Haqqani, but Ijaz didn't mention the existence of the other two other officials in that article.

In an interview on Thursday with The Cable, Ijaz confirmed the authenticity of the e-mail he sent to Jones but said its contents did not contradict his various other statements. Ijaz said that the Jones e-mail was meant as a general overview but didn't reflect the details of the involvement of the other two men, whom he identified as Jehangir Karamat, who served as Army chief of staff and U.S. ambassador under former military dictator Gen. Pervez Musharraf, and Mahmud Ali Durrani, a former National Security Advisor for Gilani, who was fired in 2009 over an unrelated dispute.

"There was only one author of the memo and that was Haqqani, but the way Haqqani presented it to me was that there was a team of people back in Pakistan involved and the two names he gave me were Karamat and Durrani," Ijaz told The Cable.

Ijaz said his current understanding is that Karamat and Durrani were involved in some unclear way in the scheme to overhaul Pakistan's military and intelligence leadership but were not involved in the actual drafting or delivery of the memo, as far as he knows.

"My impression at the time I wrote the email to Jones was that they had been probably a part of the thinking process about the ideas in the memorandum. They were probably involved at least in thinking through how you execute these things," Ijaz told The Cable. "They certainly did not have anything to do with the actual drafting of the memorandum or the delivery of the message. Then again, maybe they did, I don't know. Who the hell knows? What I put down in the e-mail was what Haqqani told me."

In his written statement to the Supreme Court, Ijaz claims that Karamat and Durrani were names given to him by Haqqani "as people that would be involved in forming the new national security team," but he did not identify them as being involved in the preparation of the document.

"[Haqqani] said there was a like-minded group of people  in  Islamabad  that would be brought on board by ‘the boss'; -- a reference I understood to mean President Asif Ali Zardari -- as the new national security team once tensions had dissipated. He mentioned two names I recognized (Jehangir Karamat and Mahmud Durrani) but added that they would be approached once this was all over -- a point I took to mean they were unaware of this operation in advance," Ijaz wrote in his statement.

The military-civilian rift over the memo reached even higher levels of confrontation this week as Prime Minister Yousuf Raza Gilani on Wednesday sacked Defense Secretary Khalid Naeem Lodhi for "gross misconduct and illegal action." Lodhi gave the Supreme Court statements pertaining to Memogate from Pakistan's military and intelligence leadership without going through the civilian government first.

The firing of Lodhi followed a warning by Army chief Gen. Ashfaq Parvez Kayani that Gilani's earlier statements, calling the actions of Kayani and Inter-Services Intelligence Directorate spy agency Ahmed Shuja Pasha related to Memogate "unconstitutional," could have "grievous consequences." Gilani had criticized the two for submitting statements to the court without going through the civilian leadership first. The stakes could not be higher in Pakistan, where the civilian government is fighting for survival and the military is seeking to assert its dominance over politics.

The newly revealed e-mail also seems to corroborate Jones's secret affidavit to the court in which Jones swore that Ijaz "gave me no reason to believe that he was acting at the direction of Ambassador Haqqani, with his participation, or that Ambassador Haqqani had knowledge of the call or the contents of the message."

Later in the affidavit, Jones hedged by writing, "I do not recall whether Mr. Ijaz claimed that Ambassador Haqqani had anything to do with the creation of the memo. I have no reason to believe that Ambassador Haqqani had any role in the creation of the memo, nor that he had any prior knowledge of the memo."

In his own affidavit to the court, Ijaz directly disputed Jones' account of events. Jones says that Ijaz called him on the phone a few days before the delivery of the memo. Ijaz refutes that call ever took place. Ijaz also swears that he did tell Jones about Haqqani's involvement during their May 9 phone call, only because Jones was extremely skeptical of the authenticity of the memo.

"I made clear to him near the end of the call that Pakistan's ambassador to the US was the originator of the message," Ijaz wrote in his affidavit. "Gen. Jones continued to express reservations but when I told him this was not for him or I to decide, that if what the ambassador was saying about the potential for a military takeover was true, that we simply had a responsibility to make sure the private message Haqqani  wanted conveyed got through to its destined recipient.  He responded by saying he would do it if the message was in writing."

In his affidavit, Ijaz again claims that Haqqani was the sole author of the memo. "The content of the Memorandum originated entirely from Haqqani, was conceived by Haqqani and was edited by Haqqani," Ijaz wrote.

Ijaz has always said that his back-channel dealings were in furtherance of his desire to expose the inappropriate influence of Pakistan's military and intelligence sectors on domestic politics. That said, since the scandal broke he has been harshly critical of the civilian government led by Zardari. The entire scandal rests largely on Ijaz's credibility and his account of events as compared to Haqqani's.

Ijaz met with Pasha Oct. 22 in London and handed over evidence he says implicates Haqqani, including Blackberry Messenger communications that Ijaz says prove Haqqani's involvement in the conspiracy. In a twist of irony, when Ijaz gets to Pakistan next week, his security will be reportedly be provided by Kayani, the military leader he originally conspired to overthrow.

In his e-mail to Jones, Ijaz also claimed that he was working with Sen. Tom Daschle and Navy Secretary Ray Mabus to deliver the document. Ijaz told The Cable today that he reached out to Daschle in an effort to reach Mabus as a conduit to Mullen -- but it never panned out.

"Daschle's condition [before becoming involved] was that the memo had to have Zardari's signature and be written on his letterhead. That sort of defeats the purpose [of the back channel], so that option was out," said Ijaz. "They were never involved directly in this. I never had any direct contact with Daschle or Mabus."

While Washington grappled with the consequences of Kim Jong Il's death, the United States, Japan, and India held the first meeting of what is shaping up to be a robust trilateral dialogue -- but all sides have been quick to say that it's not aimed at isolating China.

The four-hour meeting was held at the State Department on Dec. 19, and the U.S. delegation was led by Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell and Assistant Secretary for South and Central Asian Affairs Bob Blake. Other U.S. officials in attendance included State Department Policy Planning Director Jake Sullivan, Acting Assistant Secretary of Defense for Asia and Pacific Affairs Peter Lavoy, and NSC Senior Director for Strategic Planning Derek Chollet.

The Japanese contingent was led by Koji Tsuruoka, deputy vice minister for foreign policy, who was visiting Washington with Foreign Minister Koichiro Gemba. The Indians flew in two officials, Joint Secretary for the Americas Jawed Ashraf and Joint Secretary for East Asia Gautam Bambawale.

Two State Department officials described the meeting for The Cable. "What I really loved about it was that it just seemed like a very natural conversation among friends," one of the officials said. "The amazing thing about our governments is that we really have shared values. That's the foundation of it all. That's the glue that binds us together."

The officials defined those shared values as democracy, human rights, rule of law, transparency, open markets, freedom of navigation, and an interest in international development work. "There wasn't a moment of dissonance in the whole thing," the official said. "The challenge now is to figure out what specifically we can focus on."

This was the first trilateral meeting between the three countries; the main objective of which was to set the foundation for future talks, discuss what issues would be on the agenda going forward, and set the goal of meeting again in Tokyo next year.

Topics that were discussed inside the meeting included Afghanistan, where Japan and India are large donors, the recent East Asia Summit, Central Asia, and Burma.

"We talked about how we can work together within all these Asian organizations to advance our shared values ... and what can do to help improve the workings of all these various fora," the State Department official said. "We agreed that we need to focus our collective efforts in Afghanistan to make sure all the values we share in Afghanistan are upheld and observed."

The U.S.-Japan-India trilateral dialogue is just the latest of the "mini-laterals" that the United States has undertaken recently. These groupings, which are smaller than often cumbersome multilateral groups, are becoming a preferred way for the United States to build consensus around policies with friends and allies.

There is another trilateral strategic dialogue between the United States, Japan, and Australia that has been ongoing for five years, and now has half a dozen working groups. The United States and India have had a bilateral dialogue about East Asia for over two years now, led by Campbell and Blake. That dialogue has held four official meetings.

The State Department official said the United States is interested in setting up some "mini-lateral" structures that include China. U.S. policymakers also want to start a U.S.-India-China trilateral dialogue, the official said, but the Chinese won't sign on.

"Our Indian friends are happy to do it, we're willing to do it, but our Chinese friends are a little wary," the official said. The Japanese have also put forth the idea of a U.S.-Japan-China trilateral dialogue.

The State Department wants to be clear that this week's meetings were not about China. In fact, they said that the rise of China and how to deal with it wasn't discussed at the Dec. 19 trilateral meetings.

"We did talk about China, but it was in the context of other things," the official said. "We were actually looking for things we could do jointly with China."

Experts said that even if the trilateral dialogue wasn't about China, the fact that all three countries are cooperating in the effort to deal with China's rise looms over the discussions.

"The growing cooperation with India and Japan is driven by China's rise, there's no doubt about that. That doesn't mean it's directly aimed at China," said Patrick Cronin, senior director of the Asia-Pacific Security Program at the Center for a New American Security (CNAS). "They are all trying to respond to China's rise but not antagonizing China. From China's perspective, any cooperation is encirclement."

The initial Chinese reaction to the meeting was cautious. "U.S., Japan and India are countries with great influence in the Asia-Pacific region. We hope the trilateral meeting will be conducive to regional peace and stability," Chinese Foreign Ministry spokesman Liu Weimin told reporters.

Countries like India are interested in deepening their ties with China as well as the United States, but joining U.S.-brokered diplomatic architectures allows India to approach its engagement with China from a position of greater strength, said Cronin.

He also said that the effort was part of the U.S. goal of increased burden sharing with India, to offset the financial cost of maintaining the U.S. presence in East Asia.

"The U.S. is not looking to spend a fortune, it's looking to be a facilitator," he said. "It brings India into East Asia and Japan into the Indian Ocean and it does that at a very low cost to the United States."

The State Department officials acknowledged that part of the driving force behind encouraging India to take on more responsibility was to shift some of the financial responsibility to countries whose economies are on the rise.

 "The Indian government, for the first time in a long time, has money. It's a country that can greatly complement U.S. efforts in the region.... This theme of them being a net provider of security takes on more significance when all of a sudden they finally have the resources to expand their role," the official said.

"The whole world has been a free-rider on the United States for so long, if the Indians can help with that in an era when we face budgetary constraints, the more the better," the official said. "The U.S. has had the luxury in the past of going it alone, but it certainly makes sense to do it with your friends."

Former National Security Advisor Jim Jones has submitted a confidential affidavit, obtained by The Cable, in which he swears that he has no reason to believe that former Pakistani Ambassador to Washington Husain Haqqani had any role in the scandal known as "memogate."

Jones was the go-between in the transmission of a secret memo from Pakistani-American businessman Mansoor Ijaz to then Joint Chiefs Chairman Adm. Mike Mullen in the days following the killing of Osama bin Laden in Abbotabad. The memo, purportedly from the Pakistani civilian leadership, asked for U.S. government help to avoid a pending military coup in Pakistan and pledged, in return, to reorient Pakistan's foreign and national security policy to be more in line with U.S. interests.

Ijaz has claimed over and over that the memo and the scheme it contained was derived and driven by Haqqani, who has since resigned over the scandal and is now in Islamabad without permission to leave the country. Ijaz also claims that that Haqqani discussed the scheme with Pakistani President Asif Ali Zardari, who faces increasing domestic political pressure from opponents and is in Dubai due to what is being described as a recent "mini-stroke."

Haqqani has always claimed that he had no role in the writing or delivery of the memo. Earlier this week, Jones broke his silence on the issue by signing a confidential affidavit about his role in "memogate," which he sent to Haqqani's lawyers as part of their planned libel suit against Ijaz. In the affidavit, Jones states that Ijaz never mentioned to him that the memo came from Haqqani.

"A few days before May 9, 2011, I received a phone call from Mr. Mansoor ljaz. I have known Mr. ljaz in a personal capacity since 2006. During the call Mr. Ijaz mentioned that he had a message from  the ‘highest authority' in the Pakistan government which he asked me to relay to then Chairman  of the Joint Chiefs  of Staff, Admiral Michael Mullen," Jones wrote in the confidential affidavit.

"At no time during the call do I remember Mr. Ijaz mentioning Ambassador Haqqani, and he gave me no reason to believe that he was acting at the direction of Ambassador Haqqani, with his participation, or that Ambassador Haqqani had knowledge of the call or the contents of the message."

Jones told Ijaz he would only forward the message to Mullen if it was in writing. On May 9, Ijaz sent the unsigned memo to Jones's personal e-mail account and Jones passed it on to Mullen. Mullen has acknowledged that he received the memo but claims he gave it no credence and took no action on it whatsoever.

"It was my assumption that the memo was written by Mr. Ijaz, since the memo essentially put into writing the language he had used in our telephone conversation earlier," Jones wrote in his affidavit. "I do not recall whether Mr. Ijaz claimed that Ambassador Haqqani had anything to do with the creation of the memo. I have no reason to believe that Ambassador Haqqani had any role in the creation of the memo, nor that he had any prior knowledge of the memo."

The Jones affidavit will be used by Haqqani's legal team to bolster Haqqani's claims that Ijaz was the author's memo, not him. Ijaz's main evidence of Haqqani's involvement is a series of Blackberry Messenger communications that Ijaz claims he had with Haqqani to discuss the memo during its formation. Ijaz has said his Blackberry is being examined by Pakistani forensic experts as part of the ongoing investigation.

Ijaz's activity throughout the scandal has raised several questions about his motives. For example, he publicly disclosed the existence of the memo in an Oct. 10 op-ed in the Financial Times, purportedly to defend Mullen from attacks and slanders in Pakistan. Then, on Oct. 22, he met in London with Pakistan's Gen. Shuja Pasha, the leader of the Inter-Services Intelligence (ISI), which Ijaz's memo promised would be replaced with new, U.S.-friendly national security leaders in Pakistan.

Last week, Ijaz claimed in a Newsweek article that Haqqani and Zardari knew of the raid to kill bin Laden in advance and may have given the U.S. military tacit permission to violate Pakistani airspace. Haqqani has initiated legal action against Ijaz over those claims and the Jones affidavit is part of that litigation.

In the most interesting part of the affidavit, Jones states his personal opinion that the memo probably did not come from the Pakistani government at all.

"Upon my reading of the memo that I was asked to forward to Admiral Mullen, it struck me as highly unusual that the ‘highest authority' in the Pakistan government would use Mr. ljaz, a private citizen and part-time journalist living in Europe, as a conduit for this communication," Jones wrote. "My personal opinion was that the memo was probably not credible."

Asked for comment on Friday by The Cable, Jones declined to elaborate.

Ijaz responded to Jones' affidavit with a lengthy comment to The Cable. Here are some excerpts, after the jump:

Read on

The Obama administration first urged Senate leaders to compromise on new legislation that would sanction the Central Bank of Iran (CBI) -- but then came out today against that very compromise, angering and alienating a key Democratic Senate ally.

Two senior administration officials testified Thursday morning that the current bipartisan amendment to impose new sanctions on the CBI and any other bank that does business with them is a bad idea that could alienate foreign countries, make it more difficult to pressure Iran, and raise oil prices, which could actually help the Iranian economy.

The administration's strategy of working behind the scenes to change what's become the Kirk-Menendez Iran sanctions amendment, only to publicly oppose it today, angered several senators, including Robert Menendez himself. The New Jersey Democrat took seven minutes at the Senate Foreign Relations Committee hearing to chastise Undersecretary of State Wendy Sherman and Treasury Undersecretary David Cohen at Thursday's Senate Foreign Relations Committee meeting for asking him to negotiate on their behalf, and then criticizing the compromise he struck with Sen. Mark Kirk (R-IL).

"At your request we engaged in an effort to come to a bipartisan agreement that I believe is fair and balanced. And now you come here and vitiate that agreement.... You should have said we want no amendment," Menendez said. "Everything that you have said in your testimony undermines your opposition to this amendment. The clock is ticking."

Menendez said he regretted working with the administration on the issue, and said that perhaps he should have just agreed to Kirk's original Iran sanctions amendment, which was more severe and provided the administration with less room to maneuver than the compromise amendment that is set to be voted on and passed in the Senate as early as tomorrow.

"This certainly undermines your relationship with me for the future," Menendez told the administration officials. He also urged for more drastic measures, such as a gasoline embargo on Iran. "If the Europeans are considering an embargo, we shouldn't be leading from behind, we should be leading forward."

The break between this Democratic senator, who is up for reelection next year, and the Obama administration comes two days after the administration sent three very senior officials to meet with senators to try to get them to scuttle the amendment. On the morning of Nov. 29, Treasury Deputy Secretary Neal Wolin, Deputy Secretary of State Bill Burns, and Deputy National Security Advisor Denis McDonough called an emergency meeting on Capitol Hill, multiple Hill sources told The Cable.

They sat down with Sens. Kirk, Menendez, and SFRC Chairman John Kerry (D-MA). The officials argued that the Kirk-Menendez would get in the way of their efforts to build a multilateral coalition designed to increase pressure on Iran, and they warned the amendment might cause severe disruptions to the world oil markets and therefore have negative effects on the U.S. economy. Kirk and Menendez flatly refused to back down, our sources said, while Kerry reportedly said exactly nothing in the meeting.

The officials' sentiments were echoed in a letter sent today to Senate leaders by Treasury Secretary Timothy Geithner, who we're told is personally invested in the administration effort to thwart the Kirk-Menendez amendment.

"I am writing to express the administration's strong opposition to this amendment because, in its current form, it threatens to undermine the effective, carefully phased, and sustainable approach we have taken to build strong international pressure against Iran," wrote Geithner. "In addition, the amendment would potentially yield a net economic benefit to the Iranian regime."

Geithner argued that because the Kirk-Menendez amendment would force foreign banks to choose between doing business with the U.S. or Iran, some might choose Iran and resist going along with American unilateral efforts, thereby helping the Iranian economy and hurting our own.

Menendez addressed that point by saying that the amendment allows the implementation of the sanctions to be waived if the president determines there's not enough supply in the world oil market, or if he determines a country is making progress in divesting itself from Iranian business relationships.

"So we basically say to financial institutions, do you want to deal with a $300 billion economy, or do you want to deal with a $14 trillion economy? I think that choice is pretty easy for them," Menendez said at the hearing. "So I find it pretty outrageous that when the clock is ticking, and when you ask us to engage in a more reasoned effort, and we produce such an effort in a bipartisan basis, that in fact you come here and say what you say."

One GOP Senate aide told The Cable today that while the amendment was crafted to avoid disrupting the world economy as much as possible, administration officials' warnings of economic consequences could have an effect of their own.

"The administration is going to spook the oil markets themselves in opposition to an amendment that would not," the aide said. "They could create their own self-fulfilling prophecy of driving up oil prices, so their strategy seems to be self defeating."

UPDATE: The Kirk-Menendez amendment passed the senate late Thursday by a unanimous vote of 100-0.

Pakistani Ambassador to the United States Husain Haqqani has become embroiled in a political scandal in Islamabad and offered his resignation today to Pakistani President Asif Ali Zardari, as Adm. Michael Mullen exclusively confirmed to The Cable the existence of a secret memo that the former Joint Chiefs chairman had earlier not recollected receiving.

Haqqani, who has long been a key link between the civilian government in Pakistan and the Obama administration, has also been battling for years with the Pakistani military and the Inter-Services Intelligence (ISI), Pakistan's chief spy agency -- two organizations whose influence in Washington he has fought to weaken. That battle came to the fore of Pakistani politics this month due to the growing scandal known in Pakistan as "memo-gate," which relates to a secret backchannel memo that was allegedly conveyed from Zardari to Mullen, through Pakistani-American businessman Mansoor Ijaz.

Ijaz alleged in an Oct. 10 op-ed in the Financial Times that on May 10, in the wake of Osama bin Laden's killing in Abbottabad, Zardari had offered to replace Pakistan's powerful military and intelligence leadership and cut ties with militant groups. Ijaz said he was directed to craft the memo by a senior Pakistani official close to Zardari. Ijaz has implied -- and the Pakistani press has speculated -- that this official was Haqqani.

Last week, The Cable published an exclusive report on Mullen's comments about the memo. "Adm. Mullen does not know Mr. Ijaz and has no recollection of receiving any correspondence from him," Mullen's spokesman Capt. John Kirby said Nov. 8."I cannot say definitively that correspondence did not come from him -- the admiral received many missives as chairman from many people every day, some official, some not. But he does not recall one from this individual."

Ijaz shot back in an article in Pakistan's The News, in which he published extensive Blackberry Messenger conversations with the Zardari-linked Pakistani official, allegedly Haqqani. He insisted that the memo did, in fact, exist, and that it was delivered from Ijaz to Mullen through another secret go-between, this one a senior U.S. government official.

"There can be no doubt a memorandum was drafted and transmitted to Admiral Mullen with the approval of the highest political level in Pakistan, and that the admiral received it with certainty from a source whom he trusted and who also trusted me," Ijaz wrote.

Kirby told The Cable today that Mullen now acknowledges that the Ijaz memo does exist, that he did receive it -- but that he never paid any attention to it and took no follow up action.

"Adm. Mullen had no recollection of the memo and no relationship with Mr. Ijaz. After the original article appeared on Foreign Policy's website, he felt it incumbent upon himself to check his memory. He reached out to others who he believed might have had knowledge of such a memo, and one of them was able to produce a copy of it," Kirby said. "That said, neither the contents of the memo nor the proof of its existence altered or affected in any way the manner in which Adm. Mullen conducted himself in his relationship with Gen. Kayani and the Pakistani government. He did not find it at all credible and took no note of it then or later. Therefore, he addressed it with no one."

Zardari's civilian political enemies, such as opposition leader Imran Kahn, have seized upon the controversy. Meanwhile, the Pakistani military, led by Army Chief of Staff Gen. Ashfaq Parvez Kayani, has been pressuring Zardari to start an inquiry into the memo.

Zardari, Kayani, and Prime Minister Yousuf Raza Gilani met for the second time in two days on the matter late on Wednesday. Zardari also had a late night meeting with U.S. Ambassador to Pakistan Cameron Munter on Tuesday night.

Earlier Wednesday, on the floor of Pakistan's National Assembly, Gilani publicly confirmed that Haqqani had been summoned to Islamabad to explain his position on the memo.

"Whether he's ambassador or not, he has to come to Islamabad to explain his position," Gilani said.

In an interview late on Wednesday afternoon, Washington time, Haqqani confirmed to The Cable that he will travel to Islamabad and has sent a letter to Zardari offering his resignation.

"At no point was I asked by you or anyone in the Pakistani government to draft a memo and at no point did I draft or deliver such a memo," Haqqani said that he had written in his letter to Zardari.

"I've been consistently vilified as being against the Pakistani military even though I have only opposed military intervention in political affairs," Haqqani said that he wrote. "It's not easy to operate under the shadow of innuendo and I have not been named by anyone so far, but I am offering to resign in the national interest and leave that to the will of the president."

Haqqani declined to comment to The Cable whether or not he played any role in the controversy surrounding the memo -- for example, discussing it with Ijaz before or after the fact, as the scandal deepened. It's widely rumored that Haqqani and Ijaz have known each other for many years.

It's remains unclear whether Zardari had any knowledge of the memo at the time. In Islamabad, some speculate that Zardari may be trying to put an end to the memo-gate controversy by sacrificing Haqqani, but no decision has yet been made on whether or not Haqqani will step down. If he leaves, he will return to private life having played a key role in the U.S.-Pakistan relationship during its most tumultuous period -- a role that is mired in the secrecy and intrigue of Pakistani politics and diplomacy.

Haqqani told The Cable that he is the target of a media campaign backed by the supporters of the military's role in politics because he has focused on building ties between the U.S. and Pakistani civilian governments, rather than with the Pakistani military.

"Eighty percent of Pakistanis don't want a good relationship with the U.S., and anyone who stands up for the United States can expect to be vilified," he said.

The NSC is getting a new Pakistan director following the departure of Shamila Chaudhary, who left this last week after over a decade in government to join the private sector. She will be replaced by career Foreign Service officer Dawn Schrepel, who most recently worked for former Deputy Secretary Jim Steinberg as his special assistant on South and Central Asia issues.

Chaudhary gave up one job to take two new ones, starting today as an analyst for the Eurasia Group as well as senior South Asia Fellow at the New America Foundation. She worked for years as a self-described backbencher at the State Department, before catching Secretary of State Hillary Clinton's attention after the two debated the wisdom of engaging non-governmental centers of power in Pakistan. Soon afterwards,  Clinton promoted her to State Department's policy planning staff. She had joined the NSC in April 2010.  

"We are thrilled that Shamila is joining our South Asia team at New America," New America President Steve Coll said in a release. "She has worked all of the hard issues on the inside of government and yet retains a fresh, creative, energized and inter-disciplinary perspective. "

"I am delighted to welcome Shamila to the firm," said Eurasia Group Head of Research David Gordon in another release. "Her analytical strength and depth of regional expertise will be a true asset to our Asia coverage."

By choosing Schrepel as Chaudhary's replacement, the NSC can maintain its links to the State Department on Pakistan issues, especially with the office of Special Representative for Afghanistan and Pakistan Marc Grossman. Chaudhary was a key interlocutor between the NSC and SRAP.

Grossman will be in Pakistan Tuesday for a meeting with his Pakistani and Afghan counterparts.

Schrepel has a solid reputation and, although she is not seen as a Pakistan expert per se, she was posted in Karachi for a year. She reports to Jeff Eggers, the active duty Navy SEAL who was recently was named senior director for Afghanistan and Pakistan following the retirement of Bush administration holdover John Tien.

Eggers now leads a team of six directors at the NSC -- three on Pakistan, three on Afghanistan. On Pakistan, there's Schrepel, Phil Reiner from OSD Policy, and Tamanna Salikuddin. The Afghanistan directors are Abigail Friedman, Stan Byers, and Jeff Hayes.

All of them still report up to Gen. Doug Lute, the deputy national security advisor for Iraq and Afghanistan, who is still in place despite months of reports that he was on the way out. The Washington Post's Al Kamen reported last week that Lute told his staff he is staying "indefinitely." We're told that the White House has had trouble finding a suitable replacement for Lute, who still represents a valuable link to the military. Meanwhile, Lute seems content to keep up with the daily grind of Af-Pak policy despite the fact that he has never been a core member of the Obama clique.

Meanwhile, there's still no permanent replacement for departed India Senior Director Anish Goel. His job is being done for the time being by Acting Senior Director Michael Newbill, who accompanied Clinton on her recent trip to India. Newbill reports to Special Advisor Dennis Ross, and India remains on an entirely different bureaucratic branch from Af-Pak in the NSC, as it does at the State Department.

Secretary of State Hillary Clinton said Thursday morning that the civilian surge in Afghanistan has peaked, a message that complements President Barack Obama's announcement Wednesday night that the United States will withdraw its "surge" troops from the country by next summer..

"We have now reached the height of the civilian surge," Clinton testified before the Senate Foreign Relations Committee. "Looking ahead, as the transition proceeds, we will shift our efforts from short-term stabilization projects to longer-term sustainable development that focuses on spurring growth and integrating Afghanistan into South Central Asia's economy."

The State Department and USAID have more than tripled the number of diplomats, development professionals, and other experts in Afghanistan since 2009, resulting in economic growth, less opium production, and greater educational opportunities for Afghans, she said.

"The aim of our civilian surge was to give Afghans a stake in their country's future and provide credible alternatives to extremism and insurgency -- it was not, nor was it ever designed, to solve all of Afghanistan's development challenges. Measured against these goals, and considering the obstacles we face, we are and should be encouraged by how much has been accomplished," Clinton said.

The focus going forward will be on diplomacy and supporting a reconciliation process that separates the insurgents from the terrorists, she added. Clinton promised that the United States would continue to push for the human rights and values that it has been espousing throughout the conflict.

"Any potential for peace will be subverted if women are marginalized or silenced. And the United States will not abandon our values or support a political process that undoes the social progress that has been made in the past decade," she said. "But we believe that a political solution that meets these conditions is possible."

She did not give details about how the structure or size of the civilian surge would change as U.S. forces begin to withdraw.

As part of the drive for a political solution,  the "core group" of the United States, Afghanistan, and Pakistan will meet for the third time next week, Clinton announced. The lead U.S. official in this effort is Special Representative Marc Grossman.

Clinton called on Pakistan to be an active player in the reconciliation process, and to improve its bilateral relationship with Afghanistan. Clinton also made the fiscal argument for civilian power, noting that "an entire year of civilian assistance in Afghanistan costs Americans the same amount as just 10 days of military operations."

Committee chairman John Kerry (D-MA) opened the hearing with a full throated endorsement of Obama's plan to withdraw 10,000 troops from Afghanistan this year and the remainder of the 33,000 surge troops by next summer.

"Because of the gains made in Afghanistan and in the intervening months, I believe it was from a position of strength that the president was able to lay out the next phase of our Afghan strategy," he said, echoing Obama's remarks nearly verbatim.

Kerry called the drawdown plan "significant" and portrayed it as a way to reap the benefits of the surge.

"If you really stop and think about it, we have met our major goals in Afghanistan as articulated by the president," he said. "We have come to the point where this mission can transition."

Kerry also warned Clinton that Congress was growing more and more disillusioned with the U.S. investment in Pakistan, even as Pakistan has increasingly become the center of gravity in the battle against al Qaeda.

"In many ways, the Afghanistan war is a sideshow to the main event next door," Kerry said. "Every senator is asking questions about this relationship and the appropriations people are particularly troubled as they try to figure out what's real in this relationship."

Kerry's GOP counterpart, Sen. Richard Lugar (R-IN), called for more details from the administration and a realistic definition of success in Afghanistan.

"Troop withdrawals are warranted at this stage, but... our president should put forward a plan that focuses on more narrow goals for Afghanistan based on vital national interests and a more sober analysis of what can be achieved," Lugar said.

Sen. John Kerry (D-MA) is on a mission in Islamabad to repair the fractured U.S.-Pakistan relationship and, following meetings with top Pakistani officials, issued a statement that appeared to be on behalf of the U.S. and Pakistani governments.

Kerry, as the head of the Senate Foreign Relations Committee and an author of the Kerry-Lugar-Berman $7.5 billion aid package to Pakistan, is in a perfect position to convey congressional angst following the discovery that Osama bin Laden had been hiding in Abbottabad, perhaps for over five years. But he holds no position in the executive branch, which would traditionally determine the status of the U.S. relationship with Pakistan.

Kerry met with Pakistani President Asif Ali Zardari, Prime Minister Yousuf Raza Gilani, and Army Chief of Staff Gen. Ashfaq Parvez Kayani, and then issued a "joint statement" from him and those three leaders that seemed to express agreement between the U.S. and Pakistani governments on a wide range of issues.

"It was agreed that both the U.S. and Pakistan must recognize and respect each others national interests, particularly in countering terrorism and in working together for promoting reconciliation and peace in Afghanistan," read the joint statement, which was posted on the website of the U.S. embassy in Islamabad."It was agreed that all tracks of U.S-Pakistan engagement need to be revisited with a view to creating a clear understanding on the ways and means to carry forward their cooperation, in a mutually beneficial manner. It was also agreed that the two countries will work together in any future actions against high value targets in Pakistan."

"Pakistan's leadership welcomed the clear affirmation by Senator Kerry that U.S. policy has no designs against Pakistan's nuclear and strategic assets. Senator Kerry stated that he was prepared to personally affirm such a guarantee," the statement read.

Kerry also announced that Secretary of State Hillary Clinton would travel to Pakistan soon.

Kerry has traveled to both Pakistan and Afghanistan on behalf of the Obama administration before. He played a key role in smoothing relations with Afghan President Hamid Karzai last year, and traveled to Lahore in February to help negotiate the repatriation of CIA contractor Raymond Davis, following Davis's killing of two suspected Pakistani intelligence agents in broad daylight.

Meanwhile, the State Department wants to be clear that Kerry does not actually speak for the U.S. government.

"It wasn't a joint statement, it wasn't a U.S. government statement," a State Department official told The Cable.

Nevertheless, Kerry's actions are highly coordinated with the State Department. While Kerry was on the ground, Clinton had phone calls with Zardari, Gilani, and Kayani, a State Department official said, and spoke with Kerry as well.

Kerry is playing an increasingly prominent role in managing the U.S.-Pakistan relationship, relative to that of two other key interlocutors, Joint Chiefs Chairman Adm. Mike Mullen and CIA Director Leon Panetta. Panetta, who will be nominated to succeed Defense Secretary Robert Gates, reportedly got into a shouting match last week with Lt. Gen. Ahmad Shuja Pasha, the head of Pakistan's Inter-Services Intelligence.

Special Representative for Afghanistan and Pakistan Marc Grossman is also getting more face time with top Pakistani officials. He was on the ground in Islamabad the day bin Laden was killed and will be traveling there again this week with CIA Deputy Director Mike Morrell.

Grossman has been trying to set up the third round of the U.S.-Pakistan Strategic Dialogue, which was scheduled for late May in Islamabad. At Monday's briefing, however, State Department spokesman Mark Toner wouldn't say if the dialogue would take place then.

"The secretary does plan to visit Pakistan in order to have an in-depth strategic discussion about our cooperation and to convey the U.S. government's views on the way forward with Pakistan," Toner said. "She'll go when she can have those discussions in the right context and with the right preparation. And we're engaged right now with the Pakistanis to lay that groundwork."

Vali Nasr, who until recently was a top Pakistan advisor for the SRAP office, told The Cable that Kerry is playing two roles -- delivering a tough message from Congress while also extending an olive branch from the Obama administration.

"His job is to stabilize the relationship. The U.S.-Pakistan relationship has suffered serious setbacks. It's important to prevent it from collapsing any further," he said.

"We don't really have any option but to continue our relationship with Pakistan. One lesson from the bin Laden discovery is that if al Qaeda senior leaders are in Pakistan, we have even more work to do there."

As Congress prepares several ways to challenge U.S. aid funding to Pakistan following the revelation that Osama bin Laden had been hiding there for years, one senior congressman is highlighting the Pakistan-China relationship as a key reason to distrust Islamabad.

"In 1998 Pakistan's military and intelligence services facilitated the transfer to Communist China of a Taliban recovered unexploded American Tomahawk cruise missile, which we fired in an attempt to kill Osama Bin Laden and members of al-Qaeda. The Communist Chinese reversed engineered the missile and dissected its components allowing them to learn its vulnerabilities and defeat its capabilities," stated a May 9 "Dear Colleague" letter sent to all lawmakers from the office of Rep. Dana Rohrabacher (R-CA), the chairman of the House Foreign Affairs Subcommittee on Oversight and Investigations.

The title of Rohrabacher's letter reads, "Is Pakistan Planning to Give Our Secret Special Forces Helicopter to Communist China?"

"Pakistan must immediately return the debris to avoid compromising American secrets," the letter stated. "If this is not done now it is probable, given Pakistan's history, that the debris will find its way into the hands of the Communist Chinese military that is buying, building, and stealing the necessary military technology to challenge the United States."

The letter comes at a particularly sensitive time, as over 100 Chinese officials are in Washington today for the first day of the U.S.-China Security and Economic Dialogue, hosted by Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner.

Rohrabacher has long been critical of the Chinese government. During Chinese President Hu Jintao's visit to Washington in January, he compared Chinese officials to Nazis because of their treatment of religious and ethnic minorities.

On May 5, Rohrabacher introduced a bill to completely defund U.S. assistance to Pakistan. As of today, the bill has no co-sponsors.

But while Rohrabacher's bill may never be passed, his frustration with Pakistan's handling of nuclear and military technology, including its disbursement of nuclear technology through the network of scientist A.Q. Khan, is increasingly seen on Capitol Hill  as evidence that Pakistan's suspected harboring of bin Laden is not an isolated incident.

"The Pakistani government has built and proliferated nuclear weapons and technology around the globe in contradiction of American security. Yet, the Pakistan government continues to benefit from huge sums of American cash," his letter stated. "They are laughing at us."

The mission to kill Osama bin Laden was years in the making, but began in earnest last fall with the discovery of a suspicious compound near Islamabad, and culminated with a helicopter based raid in the early morning hours in Pakistan Sunday.

"Last August, after years of painstaking work by our intelligence community, I was briefed on a possible lead to bin Laden. It was far from certain, and it took many months to run this thread to ground," President Obama told the nation in a speech Sunday night.

"Today, at my direction, the United States launched a targeted operation against that compound in Abbottabad, Pakistan. A small team of Americans carried out the operation with extraordinary courage and capability. No Americans were harmed. They took care to avoid civilian casualties. After a firefight, they killed Osama bin Laden and took custody of his body," he said.

Sitting in a row of chairs beside the podium were National Security Advisor Tom Donilon, Director of National Intelligence James Clapper, CIA Director Leon Panetta, Joint Chiefs Chairman Adm. Mike Mullin, Secretary of State Hillary Clinton, and Vice President Joe Biden. White House Chief of Staff Bill Daley and Press Secretary Jay Carney stood in the back with about a dozen White House staffers.

Since last August, Obama convened at least 9 meetings with national security principals about this operation and the principals met 5 times without the president, a senior administration official said. Their deputies met 7 times formally amid a flurry of other interagency communications and consultations.

ABC News reported that the principals' meetings were held on March 14, March 29, April 12, April 19 and April 28.

Last week Obama finally had enough intelligence last to take action. The final decision to go forward with the operation was made at 8:20 AM on Friday, April 29 in the White House's Diplomatic Room. In the room at the time were Donilon, his deputy Denis McDonough, and counterterrorism advisor John Brennan. Donilon prepared the formal orders.

On Sunday, Obama went to play golf in the morning at Andrews Air Force Base. He played 9 holes in chilly, rainy weather and spent a little time on the driving range, as well. Meanwhile, the principals were assembling in the situation room at the White House. They were there from 1:00 PM and stayed put for the rest of the day.

At 2:00, Obama met with the principals back at the White House. At 3:32 he went to the situation room for another briefing. At 3:50 he was told that bin Laden was "tentatively identified." At 7:01 Obama was told there was a "high probability" the high value target at the compound was bin Laden. At 8:30 Obama got the final briefing.

Before speaking to the nation, Obama called former presidents Bill Clinton and George W. Bush.

Three senior administration officials briefed reporters late Sunday night on the surveillance, intelligence, and military operations that ended with bin Laden's death at the hands of U.S. operatives.

"The operation was the culmination of years of careful and highly advanced intelligence work," a senior administration official said.

The stream of information that led to Sunday's raid began over four years ago, when U.S. intelligence personnel were alerted about two couriers who were working with al Qaeda and had deep connections to top al Qaeda officials. Prisoners in U.S. custody flagged these two couriers as individuals who might have been helping bin Laden, one official said

"One courier in particular had our constant attention," the official said. He declined to give that courier's name but said he was a protégé of Khalid Sheikh Mohammed and a "trusted assistant" of Abu Faraj al-Libbi, a former senior al Qaeda officer who was captured in 2005.

"Detainees also identified this man as one of the few couriers trusted by bin Laden," the official said. The U.S. intelligence community uncovered the identity of this courier four years ago, and two years ago, the U.S. discovered the area of Pakistan this courier and his brother were working in.

In August 2010, the intelligence agencies found the exact compound where this courier was living, in Abbottabad, Pakistan. The neighborhood is affluent and many retired Pakistani military officials live there.

"When we saw the compound where the brothers lived, we were shocked by what we saw," one official said.

The compound was 8 times larger than the other homes around it. It was built in 2005 in an area that was secluded at that time. There were extraordinary security measures at the compound, including 12 to 18 foot walls topped with barbed wire.

There were other suspicious indicators at the compound. Internal sections were walled off from the rest of the compound. There were two security gates. The residents burned their trash. The main building had few windows.

The compound, despite being worth over $1 million, had no telephone or internet service. There's no way the courier and his brother could have afforded it, the official said.

"Intelligence officials concluded that this compound was custom built to hide someone of significance," the official said, adding that the size and makeup of one of the families living there matched the suspected makeup of bin Laden's entourage.

The intelligence community had high confidence that the compound had a high value target, and the analysts concluded there was high probability that target was bin Laden, one official said.

When the small team of U.S. operatives raided the compound in the early morning hours Sunday Pakistan time, they encountered resistance and killed three men besides bin Laden and one woman. The three men were the two couriers and one of bin Laden's sons. The woman was being used as a human shield, one official said. Two other women were injured.

One U.S. helicopter was downed due to unspecified "maintenance" issues, one official said. The U.S. personnel blew up the helicopter before leaving the area. The team was on the ground for only 40 minutes.

A senior defense official told CNN that US Navy SEALs were involved in the mission.

No other governments were briefed on the operation before it occurred, including the host government Pakistan.

"That was for one reason and one reason alone. That was essential to the security of the operation and our personnel," one official said. Only a "very small group of people" inside the U.S. government knew about the operation. Afterwards, calls were made to the Pakistani government and several other allied countries.

"Since 9/11 the United States has made it clear to Pakistan that we would pursue bin Laden wherever he might be," one official said. "Pakistan has long understood we are at war with al Qaeda. The United States had a moral and legal obligation to act on the information it had."

Americans abroad should stay indoors be aware of the increased threat of attacks following bin Laden's killing, the State Department said in a new travel warning issued Sunday night. State also issued a specific travel warning for Pakistan.

"Al Qaeda operatives and sympathizers may try to respond violently to avenge bin Laden's death and other terrorist leaders may try to accelerate their efforts to attack the United States," one official said. "We have always understood that this fight would be a marathon and not a sprint."

U.S. citizen and CIA contractor Raymond Davis was released from a Pakistani prison on Wednesday after $2.3 million was paid to the families of the two Pakistani men he shot and killed and Secretary of State Hillary Clinton said repeatedly on Wednesday that the United States had not paid any "blood money" to win his release.

But that's not the whole story. The truth is that the Pakistani government paid the victims' families the $2.3 million and the U.S. promised to reimburse them in the future, according to a senior Pakistani official.

Clinton's interview with NPR's Steve Inskeep was only one of many where Clinton refused to say how the money got into the hands of the Pakistani victims' families. Here's the exchange:

SECRETARY CLINTON: Well, first of all, the United States did not pay any compensation. The families of the victims of the incident on January 27th decided to pardon Mr. Davis. And we are very grateful for their decision. And we are very grateful to the people and Government of Pakistan, who have a very strong relationship with us that we are committed to strengthening.

QUESTION: According to wire reports out of Pakistan, the law minister of the Punjab Province, which is where this took place, says the blood money was paid. Is he mistaken?

SECRETARY CLINTON: Well, you'll have to ask him what he means by that.

QUESTION: And a lawyer involved in the case said it was 2.34 million. There is no money that came from anywhere?

SECRETARY CLINTON: The United States did not pay any compensation.

QUESTION: Did someone else, to your knowledge?

SECRETARY CLINTON: You will have to ask whoever you are interested in asking about that.

QUESTION: You're not going to talk about it?

SECRETARY CLINTON: I have nothing to answer to that.

In several other interviews, Clinton told reporters to ask the families -- or anyone else other than the U.S. government -- how the reported $2.3 million appeared. Obama administration officials want to focus on the fact that Davis is now returning home, not the quid pro quo that made it happen.

"The understanding is the Pakistani government settled with the family and the U.S. will compensate the Pakistanis one way or the other," the senior Pakistani official told The Cable.

The U.S. government didn't want to set a precedent of paying blood money to victims' families in exchange for the release of U.S. government personnel, the source said, adding that the deal also successfully avoided a ruling on Davis's claim of diplomatic immunity -- an issue that had become a political firestorm in Pakistan.

As the Washington Post's David Ignatius explains, the deal for Davis was part of a larger agreement to mend ties between the CIA and Pakistan's Inter Services Intelligence (ISI), the country's main spy agency. Relations between the two agencies, which were already strained, totally broke down after the Davis incident because the ISI no longer trusted the CIA to inform them of its activities inside Pakistan. The two victims Davis shot and killed were allegedly ISI agents. But now, the two spy agencies will sit down and establish "new rules of engagement" and resume cooperation, the official said.

"Now ISI and CIA are working on ensuring that their relationship remains on track and there are no future undeclared CIA operations in Pakistan that result in jeopardizing bilateral relations," the official explained.

Sen. John Kerry (D-MA) played a key role in getting the deal done. He traveled to Pakistan in February to lobby for the deal with a host of Pakistani interlocutors.

"This deal had four principal architects," Ignatius wrote. "Hussein Haqqani, Pakistan's ambassador to Washington, who shared the ‘blood money' idea with Sen. John Kerry, chairman of the Senate Foreign Relations Committee. Kerry then traveled to Pakistan, where he met with President Asif Ali Zardari, with the leaders of the Punjab government that was holding Davis, and with top officials of the ISI. Haqqani also visited CIA Director Leon Panetta the evening of Feb. 28 to share the ‘blood money' idea with him, according to a U.S. official. The final details were worked out by Panetta and ISI Director-General Ahmed Shuja Pasha."

In the end, the Pakistanis and the U.S. government can claim the deal is a win-win scenario. For Pakistan, the families' grievances have been resolved: They have been relocated within the country and the settlement is in accordance with Pakistani law. Moreover, the government of Punjab province was on board, and Zardari was able to find a solution to what had become a messy political situation for him.

U.S. officials, meanwhile, can claim victory for having secured Davis's return and will argue that no precedent was set on the subject of diplomatic immunity that could be used against the United States in the event of a similar incident in the future.

"Pakistani diplomacy worked out well, quietly and behind-the-scenes," the official said. "Pakistan's anti-U.S. media and its Jihadi sources were, as always, louder than the realities."

President Barack Obama held his monthly White House meeting on Afghanistan and Pakistan on Wednesday morning with a new roster of officials in attendance.

Past White House Af-Pak meetings have included a wide range of national security officials, but with both U.S.-Afghanistan and U.S.-Pakistan relations at a low point, today's group was expanded to include top officials from the Justice Department, the Treasury Department, and several new members of the administration.

Attorney General Eric Holder and attended the meeting for the first time. Other officials who are new additions to the roster include new White House Chief of Staff Bill Daley, the new special representative for Afghanistan and Pakistan, Marc Grossman, the new deputy secretary of State, Thomas Nides, head of the Office of the Defense Representative in Islamabad (via video conference), Vice Adm. Michael LeFever, and Deputy Ambassador to Afghanistan Tony Wayne (via video conference).

Returning officials in the room included Secretary of State Hillary Clinton, Defense Secretary Robert Gates, U.N. Ambassador Susan Rice, National Security Advisor Tom Donilon, Director of National Intelligence James Clapper, counterterrorism advisor John Brennan, Deputy NSA Denis McDonough, Under Secretary of Defense for Policy Michele Flournoy, CIA Director Leon Panetta, USAID Administrator Rajiv Shah, Joint Chiefs Chairman Adm. Michael Mullen, Joint Chiefs Vice Chairman James Cartwright, Afghanistan Ambassador Karl Eikenberry, Pakistan Ambassador Cameron Munter (via video conference), Deputy NSA Tony Blinken, CENTCOM Commander Gen. James Mattis, Commander, ISAF Commander Gen. David Petraeus, (via video conference), and NSC Coordinator for Af-Pak Doug Lute, and Deputy Treasury Secretary Neal Wolin.

Munter and LeFever have been intensely involved in the diplomatic crisis caused by the arrest in Lahore of CIA contractor Raymond Davis, which has stalled U.S.-Pakistani strategic cooperation. The Pakistani courts rejected Davis' claim on immunity Wednesday. Petraeus, Wayne, and many others have been dealing with the fallout of the accidental killing of 9 Afghan boys in Afghanistan's Pech Valley by U.S. forces Tuesday.

"We are deeply sorry for this tragedy and apologize to the members of the Afghan government, the people of Afghanistan and, most importantly, the surviving family members of those killed by our actions. These deaths should have never happened," Petraeus said on Wednesday.

A host of top U.S. military officials held a secret day-long meeting with Pakistan's top military officers on Tuesday in Oman to plot a course out of the diplomatic crisis that threatens the U.S.-Pakistan relationship.

The United States was represented by Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, Gen. David Petraeus, commander of International Security Assistance Force (ISAF), Adm. Eric Olson, commander of U.S. Special Operations Command, and Marine Corps Gen. James Mattis, commander of U.S. Central Command, Stars and Stripes reported. The Pakistani delegation included Gen. Ashfaq Parvez Kayani, Pakistan's chief of army staff, and Maj. Gen. Javed Iqbal, director general of military operations.

The meeting was planned long ago and covered various aspects of the U.S.-Pakistani relationship, but a large portion was dedicated to the diplomatic crisis surrounding Raymond Davis, the CIA contractor who was arrested in Lahore, Pakistan, last month after fatally shooting two armed Pakistani men.

"Where do you go to think seriously and bring sanity to a maddening situation? Far from the madding crowd to a peaceful Omani luxury resort of course. So that's what the military leadership of the US and Pakistan did," wrote Gen. Jehangir Karamat in a read out of the meeting obtained by The Cable and confirmed by a senior Pakistani official. Karamat is a former chief of Pakistan's army, and also served as Pakistan's ambassador to the United States from 2002 to 2004.

"The US had to point out that once beyond a tipping point the situation would be taken over by political forces that could not be controlled," Karamat wrote about the meeting, referring to the reported split between the CIA and the Pakistani Inter-services Intelligence (ISI) that erupted following the Davis shooting.

In Oman U.S. officials implored the Pakistani military to step up its involvement in the Davis case, following the Pakistani government's decision to pass the buck to the judicial system on adjudicating Davis' claim of diplomatic immunity. However, their concerns also went beyond this most recent diplomatic spat.

"[T]he US did not want the US-Pakistan relationship to go into a free fall under media and domestic pressures," Karamat wrote. "These considerations drove it to ask the [Pakistani] Generals to step in and do what the governments were failing to do-especially because the US military was at a critical stage in Afghanistan and Pakistan was the key to control and resolution."

"The militaries will now brief and guide their civilian masters and hopefully bring about a qualitative change in the US-Pakistan Relationship by arresting the downhill descent and moving it in the right direction."

A senior Pakistani official confirmed the accuracy of Karamat's analysis to The Cable. The official said that the Davis incident would hopefully now be put on a path toward resolution following a feeding frenzy in the Pakistani media, which has reported on rumors of an extensive network of CIA contract spies operating outside of the Pakistani government's or the ISI's knowledge.

"The idea is to find a solution whereby the Davis incident does not hijack the U.S.-Pakistan relationship," the official said. The most probable outcome, the official explained, is that Davis would be turned over to the United States, following a promise from the U.S. government to investigate the incident.

The United States would also compensate the families of the two Pakistani men killed by Davis, and a third man who died after two other U.S. embassy personnel ran him over while racing to the scene of the shooting. Negotiations between U.S. officials and the family members are already underway, the official said.

Shuja Nawaz, director of the South Asia Center at the Atlantic Council, said that it was the responsibility of the Pakistani Foreign Ministry, led until recently by Shah Mahmood Qureshi, to resolve the Davis case. Qureshi was removed as Foreign Minister after reportedly refusing to go along with the government's plan to grant Davis immunity.

"It's really the Foreign Ministry's responsibility," said Nawaz, "But in the absence of action by the civilian government, if the military can help persuade them to resolve this matter and find the way, that's all for the better."

But once the Davis case is resolved, there's still much work to be done in repairing the relationship between the CIA and the ISI. The ISI is widely suspected of airing its anger with the CIA in both the Pakistani and U.S. media. The latest example was Wednesday's Associated Press story that featured a never-before released ISI "statement" that said the Davis case was putting the entire ISI-CIA relationship in jeopardy.

The CIA and the ISI are talking, the Pakistani official said, but the path toward reconciliation will be a long one.

"It's a spy game being played out in the media and the CIA has told the ISI to cut it out," the official said. "The relationship remains testy. But after the meeting between Mullen and Kayani the likelihood of some resolution has increased."

Inside the Pakistani government, the Davis case has exacerbated internal tensions between the civilian government, led by President Asif Ali Zardari, and the ISI. Pakistani news agencies have been reporting that the Pakistani embassy in Washington has approved hundreds of visas for American officials without proper vetting, increasing the ease with which covert CIA operatives could enter the country.

Pakistan's Ambassador to Washington Husain Haqqani has denied that any visas had been issued from his embassy without proper authorization. An analysis of Pakistani visas granted to U.S. government employees, conducted by the Pakistani government, shows there has been no significant increase in the number of visas issued since 2007.

Regardless, the gentlemen's agreement between the ISI and the CIA that the two organizations would keep each other informed on each other's actions in Pakistan has now broken down.

"It's a vicious circle. Davis was in Pakistan because Pakistan can't be trusted. But Davis getting caught has increased the mistrust," the Pakistani official said. "Their interests are no longer congruent. Eventually the ISI and the CIA will have to work out new rules of engagement."

Special Inspector General for Afghanistan Reconstruction retired Gen. Arnie Fields submitted his resignation Monday, ending over a year of congressional complaints about his performance in overseeing tens of billions of dollars of U.S. taxpayer reconstruction funding in Afghanistan.

In a statement issued by the press secretary's office, the White House praised Fields' tenure and avoided mentioning any of the criticisms leveled by senior senators, including Claire McCaskill (D-MO), Tom Coburn (R-OK), and Susan Collins (R-ME).

"Under General Fields' tenure, SIGAR produced numerous critical reports that have improved reconstruction efforts, and helped insure that U.S.-funded programs are achieving their objectives," the White House said. "General Fields' hard work and steadfast determination have established SIGAR as a critical oversight agency... As he moves on to new challenges, he can do so confident in the knowledge that the President and the American people owe him a debt of gratitude for his courage, leadership, and selfless service to our nation."

The resignation on Monday came as a surprise to watchers around Washington, including those on Capitol Hill who had been working on his ouster, according to multiple senate aides who had been following the ordeal. Following a meeting White House staff in mid December, McCaskill told The Cable that she couldn't get any firm answers from the White House on what they planned to do about Fields.

Fields had come under heavy criticism for his leadership of an oversight office that is failing to effectively monitor the allocation of billions of dollars in U.S. taxpayer funds that are being invested in infrastructure in Afghanistan. Fields was criticized for running an office that failed to recover significant amounts of funds lost due to waste, fraud, and abuse. The work product from SIGAR, which included investigations and audits, was seen as incomplete and often off target by Congressional overseers. A memo circulated by Hill staffers earlier this year outlined the shortcomings of several of the organization's audits.

In her capacity as chairwoman of the Homeland Security and Government Affairs subcommittee on Contracting Oversight, McCaskill called Fields to testify on Nov. 18, where she pointed out that the taxpayers have given $46.2 million to the SIGAR office, but their investigations have only resulted in collections of $8.2 million.

Last July, the Council of Inspectors General on Integrity and Efficiency (CIGIE), which is meant to oversee the overseers, issued a scathing report on SIGAR, which only fueled the fire of lawmakers calling for Fields' removal.

Last week, Fields fired two of his top deputies in an apparent bid to get out ahead of the many criticisms of his leadership at SIGAR, but the move proved not to be enough to save his job. There's no word yet on his possible replacement.

"They better put a rock star in there to replace him, because we are going to keep on watching this one closely," a senior Senate aide close to the issue told The Cable.

The United States has committed $51 billion to Afghanistan reconstruction since 2001; that endowment will reach $71 billion by the end of 2011, according to the AP.