I keep mentioning the Swat Valley in Pakistan as the real center of the war on terrorism. The Al Qaeda-aligned Pakistani Taliban of Beitullah Massoud and affiliated extremist organizations have been trying for years to seize control of the bucolic former tourist attraction in Pakistan‘s Northwest Frontier Province, often with stunning brutality, and over the last several weeks a few thousand Taliban fighters have locked in bloody fight with Pakistani soldiers trying to clear the area of the extremists. Oh, and yesterday, the Pakistani government gave up.

The Taliban offered the government of President Asif Ali Zardari a truce in Swat, pending the establishment of Islamic sharia law. As the New York Times reports, the Pakistani Army evidently lacks a sufficient counterinsurgent capability, and that prompted the government and the military to talk terms, rather than continue a protracted struggle of uncertain outcome. (If ever there’s an argument for embedding counterinsurgency competencies into the U.S. national security apparatus, there it is.) The deal is being finalized, but here’s how provincial minister Ameer Haidar Hoti described it:

Hoti said troops would remain in “reactive mode” instead of “proactive mode” and would not target anyone unless threatened. He said army should be removed only after peace has been restored. Troops would play their role in reconstruction and rehabilitation, he added.

He also said the population in the area demanded to be ruled under Islamic law, but that may be an effort at saving face.

In any event, the previous Pakistani government of Pervez Musharraf tried signing a self-governance truce with militants in 2006 and it collapsed spectacularly. Perhaps this is just a time for both Pakistani soldiers and the Taliban to take a knee ahead of the next confrontation. But in the meantime, Beitullah Massoud is going to use his new Swat Valley safe haven to launch attacks against Zardari’s government — based barely 100 miles away — and to allow extremists a place to regroup before exfiltrating to neighboring Afghanistan to fight U.S., NATO and Afghan forces. And his allies will consolidate their hold on Swat by murdering the opposition, as they’ve been doing: the Times notes that Swat elected a secular party in last year’s elections, but the Taliban started assassinating its members and supporters.This is how a nuclear-armed country slips into failed-statehood.

Crossposted to The Streak.