Pakistan President General Pervez Musharraf usually likes all his political options laid out for him with military precision. The pluses and the minuses neatly spelt out by his key aides and then their recommendations on what the best course of action is. Last week, however, as the US and India turned the heat on Pakistan taking action against groups allegedly responsible for the December 13 attack on the Indian Parliament, the General found himself between a rock and a hard place.

Since Musharraf threw in his Government's lot with the Americans against the Taliban-the biggest reversal of Pakistani policy in the past two decades-Islamic extremists have been baying for his blood. Musharraf's beefed-up personal security is a stark reminder of which side he has chosen to be on.

POPULAR JINX: For Musharraf (above right) arresting Azhar (above) was a risky gamble

It has already taken a toll. The December 21 murder of the brother of Interior Minister Lt-General Moinuddin Haider-a close confidant of Musharraf and the target of many fatwas-has been linked by some to his remarks berating the jehadis a day earlier. "We cannot allow illiterates who have read a few pages of the scriptures to take over the reins of power," Haider had thundered at a seminar in Karachi. His brother's assassination, it is assumed, was meant as a warning to Haider and Musharraf.

Now with India mounting a diplomatic offensive and demanding stern action against the Lashkar-e-Toiba (LeT) and the Jaish-e-Mohammed (JeM), the groups charged by the Indian Government for the December 13 attack, Musharraf's options are narrowing. Especially with the US coming out openly against these outfits by naming them foreign terrorists organisations last week. It means that Pakistan can invite US action including freezing of financial aid if the US finds that it has taken no action against them.

The problem for Musharraf is that, like any other Pakistani leader, he would not want to be perceived as acting under Indian or for that matter US pressure. Also, given the emotive nature of the Kashmir issue, acting against groups active there is a far trickier proposition than turning their backs on the Taliban.

WAR ON TERROR AT A DEAD END CURB TERRORISM: Take tough action against terrorist groups and stave off a war. Islamic extremists will accuse Musharraf of selling out on Kashmir and he may lose popular support. DEFY INDIA: Refute India's charges and take cosmetic action against terrorists. Will face loss of US support and India could decide to attack. It could turn out to be disastrous for Pakistan.

Even more troubling for Musharraf is the fact that the Indian offensive threatens to derail his domestic agenda. There is little doubt in the minds of most Pakistanis-and certainly none in the militant Islamists' minds-that the General had always wanted to move against the extremist elements within Pakistan. Before September 11, he had held back only in fear of a rightist backlash and resentment among the hawkish elements within the army who saw the jehadis as a useful tool in Afghanistan and Kashmir. But a reshuffle in the army brass and the relatively muted protests against the Government's abandonment of the Taliban gave Musharraf the confidence to take on the Islamic political parties head-on.

It was this confidence that allowed Musharraf to incarcerate the head of the Jamaat-e-Islami, Qazi Hussain Ahmed, and the head of the pro-Taliban Jamiat-e-Ulema-e-Islam, Maulana Fazlur Rehman, at the height of the anti-Government and anti-American protests. It was the same factor that prompted him to declare on December 25-the birth anniversary of Mohammed Ali Jinnah-that he would not allow a few bigots to corrupt Jinnah's vision of Pakistan as a modern, tolerant Muslim state. "Today, I ask all those who consider themselves the sole custodians of Islam: can there be a better Muslim in the present times than this great man (Jinnah) who created this citadel of Islam?" he asked rhetorically. "It is fitting, therefore, that we look at our own conscience as a nation and assess our own deeds as his followers and admirers."

Even before that, under pressure from the US, Musharraf signalled his Government's intentions. "We are already taking measures to move against all groups that are involved in any form of terrorism everywhere in the world," he declared during his recent visit to China. Within hours of his statement, the Pakistan Government froze the assets of LeT. The accounts of JeM had been seized earlier after it featured on the US list of groups sponsoring terrorism. The offices of both groups on Pakistani soil were shut down and their signboards removed. The Government also announced a ban on organisations collecting funds for jehad.

A day later, the LeT-which draws a majority of its cadre from the Punjab heartland and continues to claim that it has never attacked civilian targets-announced that it was limiting all its operations to the Jammu and Kashmir region. It also announced a change in its leadership, presumably under pressure from the Government, although its spokesman denied this. Pakistani cleric Hafiz Mohammad Saeed, who headed the LeT, has been replaced by a council comprising only Kashmiris. Maulana Abdul Wahid of Poonch will be the group's new head. On Tuesday, the Pakistan Government arrested the head of JeM, Maulana Masood Azhar, for making inflammatory speeches inciting people against the Government, a serious charge under the military dispensation.

On Wednesday, with US Secretary of State Colin Powell announcing that the US had declared the JeM and the LeT foreign terrorist organisations, Pakistan's tone got tougher. In an interview to Pakistan Television, Foreign Minister Abdul Sattar termed these organisations "illegal and unconstitutional armies" that were "unacceptable" to the Government.

The Pakistani Government is upset that the Indian Government considers these measures merely cosmetic. For Pakistanis-and the religious parties-these amount to an upheaval. Critics of the Government continue to point out that India has not provided any proof of involvement of the LeT and JeM in the attack and that without such proof, its measures against these groups amounted to "selling out on Kashmir".

Call it conspiracy theorising or call it denial, but most people in Pakistan do not accept the Indian Government's line that the Pakistan Government is to blame for December 13. The timing of the attack-in the middle of a global crackdown on hardline Islamist groups-is precisely what makes it suspect for the Pakistanis.

POWDER KEG: Musharraf depends heavily on the army as he speaks of war but is also wary of offending the extremist elements in the ranks by clamping down on militants

Given the strong condemnation of the incident by General Pervez Musharraf's Government and unequivocal dissociation from it by all jehadi groups many Pakistanis believe that no Pakistan-backed group could have been responsible for the attack. The logic is simple: the attack made no moral or strategic sense. "If the attack was carried out by any Kashmiri or Muslim group, only lunacy or sheer idiocy could have dictated its timing and targeting," wrote Anwar Ahmad, a political commentator in the English language daily The News.

Some alternative conspiracy theorists, however, are willing to believe that some jehadi elements, under pressure from the war in Afghanistan and the Pakistan Army's desertion of their cause, may have been involved. The attack, they hint, may be the jehadis' attempt to force a conflict between Pakistan and India, a situation that would force the Pakistan military to take sides on an emotive issue.

Whatever motives Pakistanis ascribe to India preparing for war, there is no doubt that they are worried about the direction events are taking. On December 24, the Karachi Stock Exchange crashed almost 6 per cent over fears of an imminent conflict, circuit breakers checking further collapse. This at a time when most business analysts were expecting the market to climb given the successful renegotiation of its debt commitments to the Paris Club as well as an influx of foreign assistance from the IMF.

Or businessmen already reeling under the impact of the US-led war in Afghanistan, the current crisis could not have come at a worse time. Export orders have been cancelled-Finance Minister Shaukat Aziz estimates a fall of $3 billion in export earnings this year-production is at a standstill and the economy is in severe recession. It is an alarming situation for Musharraf who had justified its withdrawal of support to the Taliban partly by citing the economic benefits of supporting the US coalition.

It is still an open question whether Musharraf is able to ride out adverse reaction to these measures. Some jehadi groups do enjoy support from ordinary Pakistanis who see in their exploits in Kashmir a legitimate response to alleged human rights abuses in the Valley. And unlike other groups in Afghanistan and Kashmir, the LeT has never been linked to the much-despised sectarian violence in Pakistan. A lot will depend on whether further hectoring from India undermines Musharraf's credibility. But for the moment the Pakistan President is banking on the disparate political forces throwing in their weight behind his Government at this critical time.

In fact, the support of all political parties is perhaps the only thing Musharraf can be satisfied with. From the Jamaat-e-Islami to the Pakistan People's Party to the Muslim League, most parties have declared their support to the military regime to oppose "Indian aggression". Says Shah Ahmed Noorani, leader of the Jamiat-e-Ulema-e-Pakistan: "Elections are very important but this is not the time to pressurise the Government for them."

The General can only hope that this mood of unity holds. A rise in tensions would only make his job more difficult and would undercut his attempts to rein in the militants. And the minuses would outnumber the pluses.