1. (S) Summary: President Musharraf told Ambassador April
17 he would follow up on the planned release of 27 Taliban/Al
Qaeda detainees with the Inter-Services Intelligence (ISI).
Musharraf believed the conditions for the "peace agreement"
with South Waziristan are now more propitious than in 2006
and said the Army would not be withdrawn from South
Waziristan. Musharraf has confidence in Northwest Frontier
Province (NWFP) Governor Ghani to ensure the plan is
enforced. Musharraf's mood seemed good, despite the recent
resurgence of the restoration of the judges issue. He said
he had developed a good relationship with Foreign Minister
Qureshi on his recent trip to China and had briefed him on
terrorism and the situation in the Federally Administered
Tribal Areas (FATA).

2. (S) Summary continued: The "peace deal" raises lots of
red flags. It is hard for us to envision a "peace agreement"
in South Waziristan that did not reflect some concessions to
Baitullah Mehsud, who is emerging as Pakistan's most serious
domestic terrorist. End summary.

3. (S) Ambassador and DCM called on President Musharraf
(accompanied by his Military Secretary, Major General
Shafqaat Ahmed) April 17 to discuss the pending release of 27
Taliban and Al Qaeda affiliated detainees. Ambassador
explained the pending release had come to the attention of
President Bush and the USG did not want any of the prisoners
to be released. Musharraf replied that he thought only
seven were dangerous. Ambassador clarified that we had
considerable derogatory information about seven of them but
the others, if their release had been requested by Baitullah
Mehsud, were unlikely to be friends of the U.S. or to
Pakistan. Many, if not most of them, had been apprehended
with American assistance, both operational and financial.
Moreover, it seemed as if some Taliban detainees released
earlier had reached back to identify their still detained
associates for release. Ambassador also raised our concerns
about the late March release of Shaukat Ali, allegedly
seriously ill, and the pending release of Abu Mus'ab
al-Baluchi.

4. (S) Musharraf seemed concerned and said he would be in
touch with ISI and review the issue. He asked the Ambassador
to convey that message to President Bush.

5. (C) When questioned, Musharraf was positive about the
pending South Waziristan "peace deal" (Ref. A) which he said
(correctly) had been in the works before the new government
took office. Musharraf said the most important elements
were: (1) expelling foreigners, particularly Arabs from South
Waziristan; (2) no cross-border raids; and, (3) no retreat
of the Army. Ambassador thanked him for Ambassador Durrani's
briefing but said we were concerned that extremists would be
exchanged as part of the deal, that there would be no
enforcement of the agreement's provisions, and that it would
allow extremists time to regroup, as they had during the
failed peace agreement signed in 2006.

6. (S) Musharraf said he was certain Chief of Army Staff
General Kayani would not pull back the Army. Musharraf noted
that Kayani had briefed the civilian government a few days
ago and asked the new ministers for guidance. But he had
received no reaction or any subsequent reply. Musharraf
suggested that Awami National Party (ANP) leader Asfundyar
Wali Khan talked tough on terrorism in private but publicly
talked about cutting deals and implied the Musharraf
government had used force recklessly. "Of course force
should only be used as a last resort; only an idiot would
think otherwise," said Musharraf. But Musharraf indicated he
was getting tired of hearing this statement from the new
government.

7. (S) When we asked what was different between this peace
agreement and others in the past, Musharraf noted that NWFP
Governor Ghani was in charge of this deal and "he would not
be afraid to use force." In fact, the Pakistani Army had put
military pressure on the tribes, which had forced them to

ISLAMABAD 00001609 002 OF 002


negotiate. He explained at length the background of the
economic blockade of the Mehsuds. Musharraf argued the peace
agreements that he put forward in North Waziristan had been
successful.

8. (S) Musharraf seemed in a relaxed mood and did not raise
the ongoing political negotiations regarding possible
reinstatement of the deposed judiciary, including the former
Chief Justice. He made a few comments about Nawaz Sharif
and his political statements but largely (and accurately)
suggested the civilian government did not know much.
Musharraf said he had taken advantage of his trip to China to
brief FM Qureshi on a range of issues.

9. (S) Comment: Both Musharraf (indirectly) and Durrani
(directly) implied the release of the 27 extremists had
nothing to do with the pending peace deal. Subsequently
(septel), Prime Minister Gillani and Pakistan People's Party
leader Zardari reiterated there was no connection between the
peace agreement and the 27; both said flatly that the 27
would not be released. In our view, it would be hard to have
a peace arrangement in South Waziristan without the
concurrence of Baitullah Mehsud, which means that some
concessions have been made or soon will be made. Embassy
will continue to raise red flags about the peace deal and the
appeasement of terrorists with the Prime Minister and with
ANP leader Asfundyar Wali Khan. End comment.

PATTERSON