Here is one linkto what I said about the proposed confederation. The article is quite succint:
The missed opportunity came in 1956-57 when Aslam Khattak was first our First Secretary and then Ambassador in Kabul. By then we had a full-blown ‘Afghan Problem’. Prime Minister Suharawardhy called a meeting in which Army Chief General Ayub Khan “dismissed our neighboring country in proper Sandhurst style. ‘Afghan problem?’ he said gruffly. ‘What is the Afghan problem? A little strategic bombing and an armoured thrust would settle it once and for all!.’” It was then that Pakistan, with Aslam Khattak in ‘Track Two’ mode, so to speak, started the proposal for a Pakistan-Afghan confederation. He wanted to get Prime Minister Sardar Daud on his side because "Daud honestly believed that the Pathans were oppressed in Pakistan. He considered it a duty to help his brethren. He may also have been suspicious about the ‘A’, for Afghan (Afghanica) province in Pakistan. Did it mean we wanted to take over his country? At the same time, we thought that Daud was in league with India and bent upon dividing our country with Delhi. As was often the case in such circumstance, both sides were wrong." Daud was King Zahir Shah’s first cousin and married to the King’s sister. It was he who eventually deposed Zahir Shah. Khattak went to see Daud and told him that he wanted “to remove the misunderstanding between our countries…”
Next, Khattak separately met the “royal uncles”, Shah Wali and Shah Mahmood, and took them into confidence. “I told him that Pakistan and Afghanistan would have to form a confederation if they were to survive threats from the USSR and India.” After considerable humming and hawing both agreed to take the idea further. “Now I was ready to try my hand with Sardar Daud, whom I thought would be my most difficult hurdle.” After Daud had made his complaints and Khattak had clarified them, including the letter ‘A’ in the name ‘Pakistan’, they decided that there should be an exchange of visits between King Zahir Shah and President Iskander Mirza. Actually both President Mirza and Prime Minister Suhrawardy went to Kabul together, which is highly unusual. While King and President were involved in ceremony, the two Prime Ministers started talking. After they left, Khattak continued the dialogue with Daud, who “suggested that we include some friendly missions in our discussions, such as Turkey and the USA. Sardar Daud said that the Americans should foot the bill of our mutual development projects when we confederated. Both sides would maintain internal autonomy, he proposed, but they would form a Central Government for defence, foreign policy, foreign trade and communications. The Prime Ministers would rotate.”
If you are surprised at how far the dialogue went, there was more. Feroz Khan Noon had replaced Suhrawardy as Prime Minister. Khattak raised the question of head of state of the confederation with him. “In his grand way [Noon] said we should have no difficulty accepting King Zahir Shah as the constitutional head of state. ‘After all, for some time after independence we had a Christian queen. Now we would have a Muslim man’. President Mirza concurred in this.” When Khattak next met Daud, he said that "…a confederation was the correct step to realise our common destiny. I noted that Pakistan was a democratic country and asked what would be the position of the King. He promptly replied, ‘We shall be a republic if Pakistan so desires.’" So here was Pakistan ready to accept the constitutional monarchy of Zahir Shah in the new Pak-Afghan confederation and there was Afghanistan prepared to become a republic.
As to the USA, Aslam Khattak says, **“The Americans agreed to help in a big way. They were prepared to enlarge Karachi harbour and to develop another port. They agreed to provide fifty locomotives and five hundred wagons and to extend the Chaman railway to Kandahar and the Torkham rail line to Jalalabad. Sardar Daud wanted them to extend the Jalalabad railhead to Kabul and to commit to connect Kandahar and Kabul by rail.” **They had actually got into post-confederation details.
Then came mistakes. Daud came to Pakistan and while inspecting a shipyard in Karachi a bullet ricocheted off a ship and hit Aslam Khattak instead. **Undaunted, they decided to bring Ghaffar Khan into the equation. He was released from prison and sent to Kabul, where he agreed to help in removing Pakistan-Afghan differences provided President Mirza agreed to hold a referendum on the One Unit. Mirza agreed. The American Ambassador in Karachi assured Ghaffar Khan through the American Ambassador in Kabul that the referendum would be held. But it wasn’t. **“I have never known,” says Aslam Khattak, “exactly why he did not go ahead and do the job that he said he would. He may have got word from some important Pathans in Pakistan that, if the Afghans stopped speaking about the Pushtuns, the Punjabis would literally turn them into camp followers and second-class citizens. At any rate a great chance to change the face of history was missed.”
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