Moderate political parties won power in Pakistan a year ago promising to quell Islamist violence but the bloodshed has only intensified as leaders dither.

U.S. envoy for Afghanistan and Pakistan Richard Holbrooke began his effort to stabilise Afghanistan with talks on Tuesday with Pakistani leaders who are struggling to come up with a coherent plan to tackle militant violence.

"It's not a law and order problem. It's a rebellion, it's an insurgency," Amir Haider Khan Hoti, chief minister of the North West Frontier Province (NWFP), the epicentre of militant violence, said in a recent speech.

U.S.-led forces in Afghanistan are struggling to stem intensifying Taliban violence, most of which, they believe, emanates from the Pakistani side of the border.

But while al Qaeda and Taliban militants have been using remote border enclaves to launch attacks into Afghanistan, they have also extended influence across the northwest.

They now pose a deadly challenge to a coalition of moderate and secular parties which won February 2008 elections and took over in North West Frontier Province (NWFP) and Islamabad.

In NWFP, the Awami National Party (ANP), the main ethnic Pashtun nationalist party, defeated Islamic hardliners who had ruled the province since 2002.

But after a year of disagreement with the military over how to tackle the militants, the provincial government is losing support while many of its leaders rarely venture out into public.

In July last year, the militants gave the ANP government an ultimatum: quit or face their wrath.

"It's not question of running the government. It's question of survival," provincial information minister and ANP official Mian Iftikhar Hussain said in Peshawar.

SOFT-PEDALLING, HARSH ACTION

Peshawar, the gateway to Afghanistan and for hundreds of years a bustling trade hub, feels like a city under siege.

With militant intimidation and violence ever more common, banners reading "give us protection or quit government" have begun appearing on streets in protest against the insecurity including a rash of kidnapping by criminals linked to militants.

Analysts say disagreement between the ANP and the military has thwarted the evolution of effective strategy.

The province's Swat valley, not long ago a prime tourist destination but now virtually under control of the Taliban, illustrates the danger facing the country at large.

Weeks after coming to power, the ANP, mindful of public opposition to "America's war", struck a deal with the Taliban in the valley despite objections from the military which wanted to press on with an offensive it had launched months earlier.

The militants emerged from hideouts and reoccupied territory they had abandoned in the offensive. They then scrapped the pact saying authorities had reneged on a promise to free captives.

Now the military offensive is back on and tens of thousands of civilians are fleeing from the valley after, residents say, dozens were caught up in clashes and killed.

"It oscillates between soft-pedalling on the militants and then coming down harsh on them," Farhat Taj, an ethnic Pashtun academic based in Norway, said of the counter-insurgency policy.

"It would be better for the people of NWFP if the two remove the mistrust and join efforts," she said.

The vacillation between talks and attacks is mirrored by the central government, which rules the Pashtun areas on the border.

The United States, frustrated by "soft-pedalling" in the North and South Waziristan border regions, the fount of much Afghan violence, has taken matters into its own hands with dozens of missile attacks on militants by pilotless drones there.

Authorities say they want to talk to militants who give up arms but analysts say the Taliban won't negotiate on those terms.

With renewed U.S. focus on Afghanistan and a surge of U.S. troops there, even more pressure will build on Pakistan to tackle the militant sanctuaries.

"I don't foresee any drastic change," said Rahimullah Yousufzai, a newspaper editor and expert on Pashtun affairs.

"If the U.S. deploys more troops in Afghanistan and uses force, then it will have an impact here. It's a very tricky situation for the government."