The US finally recognizing ISI’s connection to the militants. This would probably come as a disappointment to folks who think RAW is arming & funding the militants. Another key observation by the US - Pakistan is more at threat from internal elements than India. 
Time to get some heads out of the sand ??
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DAWN.COM | World | US working to reduce ISI?s influence in govt
WASHINGTON: The United States wants to empower those elements in the Pakistani government and the military who want to cooperate effectively in the war against terror but are prevented by the ISI from doing so, says a senior Pentagon official.
During a US Senate hearing on the new strategy for Afghanistan and Pakistan, Undersecretary of Defence for Policy Michele Flournoy said the United States was also trying to reduce the current level of cooperation between the ISI and the Pakistani military.
The agency’s role in the war against terror, described as ‘ambiguous’ by a US general, came under discussion in the Senate Armed Services Committee on Wednesday when several lawmakers blamed it for helping the militants.
Former Republican presidential candidate Senator John McCain raised the issue, asking US officials appearing before the panel if the Pakistani government and the military were so closely tied to the ISI that it prevents them from cooperating effectively with the United States.
‘I think ISI is or parts of ISI are certainly a problem to be dealt with,’ said Undersecretary Flournoy, one of the two witnesses testifying before the committee. But I think we have a new democratic government and I think we have strong parts of the military who see the extremist threat, who want to deal with that extremist threat. And part of our policy challenge is to empower them to be more effective in doing that.’
‘So you see progress in trying to reduce the cooperation that exists between the Pakistani military and the ISI, which has been significant and deep?’ asked Senator McCain.
Gen. David Petraeus, commander, US Central Command, who also appeared as a witness before the committee, agreed with Senator Lieberman. 'I strongly agree with that, senator. In fact, that’s why I’ve repeatedly used the term ‘sustained, substantial commitment,’ while talking about America’s relationship with Pakistan.
‘There is history there. Pakistan will quote that history to you in the first paragraph of any conversation. There is a 12-year period where Pakistani officers, for example, did not come to the United States,’ said Gen. Petraeus while referring to the sanctions imposed on Pakistan in 1990.
‘There’s a lost generation, and the entire military remembers the very much up-and-down relationship that we have had over the years.’
Gen. Petraeus said that the Kerry-Lugar bill that pledges $1.5 billion of annual aid for five years shows that this time the US was making a ‘sustained, substantial commitment … as do some of the Pentagon requests that will be coming up with the budget.’
Senator Susan M. Collins, a Republican, referred to media reports that Pakistani military officers, particularly those in the ISI, have had ‘very close and troubling ties’ with the Taliban, both in Afghanistan and Pakistan.
**Gen. Petraeus said that there have been examples of Pakistani intelligence officials passing on information to the militants.
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‘We have discussed those with the head of the ISI, Lt. Gen. Pasha. I have done that, the chairman of the Joint Chiefs (Admiral Mike Mullen), others; Ambassador (Richard) Holbrooke and I had a session with them together,’ he said.
‘The Pakistan military, again, we’ve had these same conversations with them. There is going to have to be a process of building trust.’
**But to build this trust, according to Gen. Petraeus, Pakistan needs to change its threat perception, which is right now focused on India and needs to be refocused on the western border where the Taliban and al-Qaeda activists operate.
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**‘This starts, frankly, all of this in Pakistan begins with them embracing the idea that the biggest threat to their country’s very existence is the internal extremist threat rather than the threat to their east,’ the general said.
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‘That is a recognition that they have stated verbally … we have heard it privately. We now need to help them operationalize that; to watch them, and among, again, the metrics needs to be measures of their commitment to truly go after this threat,’ he said.
Gen. Petraeus warned that the threat coming from the western borders could literally take down the Pakistani state, ‘if it’s allowed to creep out and to grow, and certainly to cause bigger problems regionally and, potentially, globally.’
