By Maria Golovnina and Mehreen Zahra-Malik
ISLAMABAD (Reuters) - Months after promising peace talks with Islamist insurgents, Pakistan's new prime minister appears to be backing down and accepting that the use of military force may be unavoidable in the face of escalating violence across the South Asian country.
Almost 200 people have been killed in rebel attacks in Pakistan since Prime Minister Nawaz Sharif came to power last month, advocating peace talks with the Pakistani branch of the Taliban.
Sharif's tougher line signals that Pakistan's powerful military still has the upper hand in policy-making, despite hopes that the government would have a larger say after he came to power in the country's first transition between civilian administrations.
"Of course we want to try talks but they are a far off possibility," said a government official, who has knowledge of discussions between civilian and military leaders on how to tackle the Taliban.
"There is so much ground work that needs to be done. And when you are dealing with a group as diverse and internally divided as the Pakistani Taliban, then you can never be sure that every sub-group would honor talks."
The military has ruled Pakistan for more than half the 66 years it has been independent.
Seeking to dispel a view that he is losing the momentum, Sharif, who once said that "guns and bullets are not always the answer", has promised to come up with a new security strategy.
But progress has been painfully slow, blighted by infighting and the army's long-standing contempt for the civilian leadership.
An official report into the killing of Osama bin Laden by U.S. forces in Pakistan in 2011, leaked this month, offered striking insights into just how deep this distrust runs.
In the document, the former chief of the ISI intelligence agency, which is dominated by the military, was quoted as saying bluntly that the country's political leadership was "unable to formulate any policy".
In the meantime, attacks continue unabated.
A bomb ripped through a busy street in Lahore on July 7, striking in the heart of Sharif's otherwise relatively peaceful home city. President Asif Ali Zardari's security chief was killed in a suicide bomb in Karachi on July 10.
"They (the Pakistani Taliban) see this as an opportunity. They want to send a message to Nawaz Sharif of their strength and his relative weakness," said Ahmed Rashid, an author and expert on the Taliban.
"The army is against the talks right now. They want to hammer these guys a little bit more."
Yet, the military and the ISI are in favor of talks involving the Taliban in neighboring Afghanistan. Although the Pakistani Taliban accepts the leader of the Afghan faction as its own leader, the two groups operate separately.
NEED CLEAR PLAN
Pakistan's military leaders are at pains to distinguish between the Afghan Taliban, which they argue can be seen as fighting against occupation, and its local imitators who they see as domestic terrorists.
The United States, Pakistan's biggest donor, wants Islamabad to come up with a clear plan and step up its campaign against groups such as the Haqqani network which regularly attacks U.S. forces in Afghanistan from hideouts in Pakistani mountains.
The Haqqani network is allied to the Afghan Taliban, but has bases in the rugged borderland between Afghanistan and Pakistan where other militant groups are also based.
"The hardball talk (from the government) has only come because the militants have shown that they really don't care (who is in power)," said Samina Ahmed, South Asia Project Director for the International Crisis Group. "(The Taliban) are willing to take them on regardless."
Known as the Tehreek-e-Taliban, the Pakistani Taliban is a loose alliance of al Qaeda-linked militants fighting to topple the government and to enforce austere Islamic law.
The army says talking to them is meaningless unless they lay down their arms. But the Taliban themselves, enraged by a May 28 drone strike that killed their deputy chief, Wali-ur-Rehman, are in no mood for negotiations either.
"We have authorized our people all over Pakistan to fully react if the government and security forces conduct operations against them," said one Taliban commander in the tribal western region of South Waziristan.
CONFUSION ON THE GROUND
Indeed, ceasefire deals have failed in the past, only allowing militants to regroup and strike again.
Sharif's plan sees a shift from the previous government's 3D policy of "deterrence, development, democracy" to "dismantle, contain, prevent, educate and reintegrate".
It's unclear what this means in practice, and there is still no consensus. An all-party conference, designed as a step in adopting the new security plan, has been postponed indefinitely.
One stumbling block is the military - Pakistan's army largely has a free hand regarding internal security. It is the army, its intelligence agencies and the Taliban itself who will decide whether to talk or fight.
Politicians hope that may be changing.
"The army also understands that it can't go it alone anymore and for the sake of domestic stability and for its own survival, it may just relent," said a source in Sharif's ruling PML-N party.
For now, Sharif, who has twice been prime minister and was ousted in a 1999 military coup, is maneuvering carefully.
He has made a rare visit to the ISI headquarters to confront the generals face-to-face, while also ordering to set up a working group to initiate peace talks with militant groups.
His main idea is to establish an independent body above the government to coordinate intelligence sharing and correct what is known in Pakistan as the "civilian-military imbalance". Some in the military believe the ball is in his court.
"Today it would be incorrect to say that the army has full control over policy making," said one retired senior army officer. "It is just fashionable to say the army doesn't let civilians work. Question is, do they want to work?"
But for now, when it comes to the Taliban, there is more confusion than clarity.
"On the ground there is no policy as such," said one senior police officer posted in the Khyber Pakhtunkhwa region on the Afghan border. "Should I fight them or talk to them?"
(Additional reporting by Syed Raza Hassan in Islamabad and Jibran Ahmad in Peshawar, Editing by Raju Gopalakrishnan)