Nawaz, who has been a journalist with The New York Times and held senior positions in the International Monetary Fund, is now a consultant to the Rand Corporation and several Washington, DC-based think tanks, and the author of Crossed Swords: Pakistan, Its Army, and the Wars Within.

The expert, who is known to be plugged in to the top hierarchy of the Pakistan army, has been much sought after in recent days for his insights into the developing situation in the subcontinent.

In an interview with Rediff India Abroad Managing Editor, News, Aziz Haniffa, Nawaz discusses the Mumbai terror attacks [Images] and the latest crisis in South Asia:

India says the perpetrators are Pakistani, and that the captured terrorist has admitted to membership in the Lashker-e-Tayiba. Pakistan President Asif Ali Zardari [Images] denies they are Pakistani. Where is this leading up to?

I hope that it doesn't continue to unravel, so much as it sort of hangs together, because they (India and Pakistan) need to get out of this kind of public exchange mode into quiet diplomacy mode. That is the best way forward for both, because the more the governments speak to each other through the media, the more they are going to feed the frenzy of these elements in society that want them to take stronger stands.

How can Zardari say with such authority that the terrorists are not of Pakistani origin?

That's what he's been told to say, and so he's following his brief. My point is that rather than having this kind of public exchange -- Zardari made these denials on CNN's Larry King show -- this is the kind of exchange that they should be having quietly with their Indian counterparts. With this kind of public debate, the actual process of sharing information will be broken.

Who told Zardari what to say -- the Pakistan army?

I don't know if it's just the army, because they've been meeting as a group. There must have been some briefing provided to him by his colleagues. They could be from the military, they could be from the civil segment. There are people who prepare the briefs, and they may have said we don't know yet, so you can't confirm something like this.

The Zardari government is demonstrably weak. Can it control the terrorists, and will the military leadership permit the government to act, especially if rogue elements in the army and ISI are complicit?

The Mumbai attack really doesn't make any sense to me, particularly if people within the military or the ISI were in the know. The reasoning is simple: The Pakistan army is already overstretched and it is feeling vulnerable, because they have moved a lot of troops from the Indian border to the Afghan border.

It is well known that India has the Cold Start strategy, and it has been practicing it. This is the strategy under which you place battle groups near the border and can activate them very rapidly to cross over and take territory and hold it. The advantage of this over previous Indian formations is that previously, the focus was on moving large forces, and doing that cost you the element of surprise.

Pakistan knows India is now using Cold Start, and still had to move six divisions to the Afghan border. Given that, it is inconceivable for Pakistan's army to have been involved in something like this, because the last thing you want is to open another hot border, on the East.

My guess is that whatever happened didn't have any official connection. I don't think the Indian government is alleging that either.

Are you convinced terrorist groups like the Lashkar-e-Tayiba, previously controlled by the ISI, have broken free and are acting independently?

For quite some time now -- actually, after 9/11 and after the Indian parliament attack � the Lashkar-e-Tayiba has gone rogue. A lot of the information has been emerging, from the attacks on the Pakistan army in the last year or two, that the fingerprints of these groups are on it, and that they have moved over to FATA (Federally Administered Tribal Areas) and have been training the Tehrik-e-Taliban [Images], the indigenous version of the Taliban, in bomb-making and suicide bombing and all that kind of stuff.

They've also been involved in fighting the Shia where there has been sectarian violence between Shias and Sunnis. And they've also been seen by many people as a kind of franchisee of al Qaeda.

It is not just the Lashkar-e-Tayeba -- it's all these Sunni militant groups from central and southern Punjab. For instance, the car that was used in the bombing of the Danish embassy in Islamabad [Images] had been stolen from Jang, the headquarters of the Lakshar-e-Janghvi, and the main centre for the activities of these groups.

So there have been links established, and in 2007, there were 60 suicide bombings that took place in Pakistan of which roughly 40 were aimed at the armed forces. In a number of these, including on soft targets like school buses and so on, these guys were alleged to be involved. As a result, I really don't see any relationship between them and ex-army or ex-ISI as has been happening in the past.

Are you in agreement with the consensual view that the attacks, apart from hitting India's growing economy, were designed to sabotage the nascent rapprochement between Delhi [Images] and Islamabad?

Absolutely. If you recall, it took place two days after the home secretaries had met in Islamabad and agreed to joint operations for counterterrorism. It also happened while the Pakistan foreign minister was in Delhi trying to follow up on the message that Zardari had given by videoconference about opening up the borders, visa-free travel, free trade union and so on. So the timing obviously was that it was meant to do damage to that.

Why would terrorists want to sabotage such a rapprochement?

It cuts the ground from under their feet in terms of building up an enemy. That's how you recruit -- you have to recruit an enemy first.

Has militancy moved beyond the Kashmir issue and onto a far greater objective?

I believe they probably still want to have some independent relationship with what's happening in Kashmir. But they've now clearly broadened their ties, and there are probably links that are transnational between the Lakshar, the Bangladeshi groups, SIMI [Images] (Students Islamic Movement of India) and the Indian Mujahideen [Images]. Even if you accept the fact -- and we don't know it to be a fact yet --- that all shooters who were involved in this incident come from outside, they would not have been able to function without inside knowledge and direction.

So there obviously is an alliance inside India with disaffected Muslim youth, and that is the broad galaxy in which we are operating now.

Do you feel the interventions of US Secretary of State Condoleezza Rice [Images] and Chairman of the Joint Chiefs of Staff Michael Mullen may have helped to cool down tensions to some extent?

It helps both sides realise that there is an outside interest in here. Of course, the Americans have a selfish interest too, because if Pakistan suddenly is distracted by rising tensions on the eastern border, it's not going to be able to maintain its presence on the western border. That's one, and the other is, since the US now, after a very long time, has a warm relationship with India, it can use its influence with India as well as with Pakistan as an interlocutor.

My feeling is with Condi Rice and Mullen as interlocutors, if there's verifiable evidence -- and that's the key, whatever evidence that's provided should be verifiable -- it could be checked out by a third party, preferably the US, because that way it's not a question of everybody trying to gang up on Pakistan.

You researched your book for nearly three decades, and you are known for your contacts within the Pakistan army. What do you think will be the army's role in the ongoing investigations? Will they get involved, or will it be hands off?

I believe the army will be presenting its assessments to the civilian government, letting them know what the implications are of heightening tensions, of their own state of readiness, and such.

My sense of the current leadership of the army is that they are fairly well-tempered and rational individuals not given to impetuous acts. I've spent time speaking with Chief of Army General Ashfaque Kayani and with Ahmed Shuja Pasha, the former director general, Military Operations, and now head of ISI, and they are all very deliberate individuals.

So it is not that they will take a jingoistic position. There is, of course, no benefit to either country from a war, so the best thing is to go into quiet diplomacy mode, share information and try to get the other side to move off its position.

Both sides need to be looking at their positions and saying okay, what's the best way in which we can resolve this without bringing forces to the border. Because once you do that, then a very different dynamic is created. Then you are appealing to certain parts of the gallery at home, and that will push you more and more into situations of conflict, which is what happened in all the wars the two countries have fought.

Complete coverage: Terror strikes at Mumbai's heart