Militants in Pakistan's tribal areas have extended their reach despite President General Pervez Musharraf's emergency decree which, he said, was aimed at pushing them back from the mini-state they have carved out, a media report said on Friday.

In the last several days, militants have captured more territory in Pakistan's settled areas, chasing away frightened policemen, the New York Times reported quoting local government officials.

The takeover of the small Alpuri district headquarters of Shangla this week, the Times says was considered a particular embarrassment for General Musharraf. It showed how the militants could still thumb their noses at the Pakistani Army.

In fact, local officials and Western diplomats told the paper that there is little evidence that the 12-day-old emergency decree has increased the government's leverage in fighting militants, or that General Musharraf has used the decree to take any extraordinary steps to combat them.

Instead, it has proved more of a distraction, they said, forcing General Musharraf to concentrate on his own political survival, even as the army starts its first offensive operation since the November three decree.

The success of the militants in Swat, has caused new concern in Washington about the ability and the will of Pakistani forces to fight the militants who are now training their sights directly on Pakistan's government, not only on the NATO and American forces across the border in Afghanistan, Western officials were quoted as saying.

After weeks of heavy clashes, the militants largely control Swat and are pushing into Shangla.

All sites lie deeper inside Pakistan than the tribal areas, on the Afghan border, where Al Qaeda [Images], Taliban, assorted foreign and local militants have strengthened their hold in recent years.

In Alpuri, a crowd of militants easily took over the police station, despite the emergency decree, Mayor Ibad Khan told the paper.

"They came straight to the police station; it was empty," he said in a telephone interview.

The shelling of militant positions in several sub districts of Swat, and in neighbouring Shangla in the last several days was the first significant action by the Pakistani Army in the area, Western defense officials told the Times.

One Western diplomat was quoted as saying a military briefing on Thursday in Islamabad was intended to convince foreign countries of the feasibility of the government offensive. Instead, the official said, the presentation only underscored the Pakistan Army's lack of counterinsurgency skills as it tries to battle about 400 well-supplied and well-trained militants in the region.

Local militants in Swat are led by Maulana Fazlullah, a charismatic Islamic cleric and are also joined by Islamic fighters of Uzbek, Tajik and Chechen origin, residents were quoted as saying.

Fazlullah leads the Movement for the Enforcement of Islamic Laws, a Taliban-style group that has forced the closing of schools for girls and shut down video stores.

"We are just waiting. The situation is worse than 10 days ago. Civilians have already been killed," local residents said over telephone.