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Editor’s Note: The neoconservative vision of remaking the Middle East so it would conform to U.S. strategic interests is on the verge of turning into an unspeakable nightmare as nuclear-armed Pakistan teeters on the brink.

In this guest essay, the Independent Institute's Ivan Eland looks back on how this happened and looks forward at how to avert catastrophe:

Pakistani president Gen. Pervez Musharraf is now teetering on the edge of the abyss, just as I predicted in the spring of 2007. He was pushed there by U.S. policy, and worse yet, his country is armed with nukes.

To prevent the Pakistani Supreme Court from declaring him ineligible to serve another term as president, a role he won last month in dubious elections, the autocratic Musharraf has declared martial law and ousted the Supreme Court’s chief justice.

Although President George W. Bush has asked Musharraf to set an end date for the state of emergency, to hold elections, and to give up his powerful position as head of the armed forces, Bush has continued U.S. aid and recently described Musharraf as an ally America needs in order to fight al Qaeda.

These signs of continued U.S. support have emboldened the spent Musharraf regime. Although Musharraf has set parliamentary elections for January 2008, they will hardly be fair, unless martial law is lifted prior to the plebiscite.

Meanwhile, the Pakistani population smolders with anger against the unpopular dictator, and in Pakistan’s northwest, Islamic militants are ascendant.

How did the Bush administration help create this mess?

It all started in 2002. The Bush administration decided U.S. forces should stay and occupy Afghanistan after their successful invasion to oust the radical Islamist Taliban movement from power.

Meddling in and occupation of Muslim lands by non-Muslims is what drives Islamists to violent acts—guerrilla warfare and terrorism. For example, American support for the corrupt Saudi Arabian regime, and U.S. military presence in holiest lands of Islam, led Osama bin Laden to launch his terrorist campaign against the United States.

Similarly, continued U.S. and Western occupation of Afghanistan and the failed attempt to eradicate opium, the primary crop of the poor Afghan people, have led to Afghan disillusion with the West and increased support for a resurgent Taliban movement.

That’s where Pakistan comes in. The Pakistani intelligence services, in order to dominate Afghanistan, supported the Taliban in its original quest for power, and during its despotic rule.

Although Musharraf, under intense pressure to switch sides after 9/11, rhetorically supported the U.S. “war on terror” and pocketed $10 billion in American aid, he needed the support of those same Islamists to survive in power. Thus, he never made a real effort to capture or kill Osama bin Laden, suspected to be hiding in northwest Pakistan.

On the contrary, he pledged not to attack the Islamists in that area. Meanwhile, as with the U.S. occupation of Afghanistan, U.S. backing and military assistance to the Musharraf government has fueled an Islamic resurgence in Pakistan, too.

Now it is within the realm of possibility to have a repeat of the 1978 situation in the Shah’s Iran. The population could become so enraged at a brutal dictator supported by the United States, that eventually a hostile radical Islamist government would take power.

But this time, in Pakistan, it would be a regime with nuclear weapons—in short, an Islamic bomb. So the Bush administration may yet hand us the worst of all worlds: bin Laden and company still on the loose and again guarded by an Islamist regime, this time with nuclear weapons.

The Bush administration has continually exacerbated the threat of radical Islamism by refusing to see that U.S. meddling in Islamic nations is fueling the problem. Overt U.S. occupation of Afghanistan and support for Afghan President Hamid Karzai, along with U.S. backing and aid to Musharraf in Pakistan, have inflamed the entire region.

So after 9/11, what would have been a better U.S. policy?

After the destruction of the Taliban regime in Afghanistan, the United States should have called a conclave of all Afghan groups and stated that Afghan governance was the business of Afghans; but if any Afghan government gave anti-U.S. terrorists sanctuary, the U.S. military would return with a vengeance. If the U.S. had employed such a policy, the Taliban likely would not be resurgent today.

As for Pakistan, for an entire year after 9/11, Musharraf quietly gave the United States free reign to nab  bin Laden. But instead of using its covert forces quietly to take full advantage of this offer, the U.S. provided ostentatious diplomatic support and military aid, turning Pakistan—in the eyes of the Islamists—into an American puppet.

The first step toward a smarter policy in the region is to recognize that the United States is part of the problem.

In Afghanistan, the United States still could do what it should have done after 9/11; withdrawing its forces would extinguish the fire of the Taliban resurgence. In Pakistan, Musharraf is likely to fall, but such a close U.S. hug for him makes it more likely that Islamists could eventually win power.

So the U.S. should use Musharraf’s declaration of martial law as a reason to terminate all aid to his regime. The United States is so unpopular in the region that supporting a governing alliance between Musharraf and former Prime Minister Benazir Bhutto would probably delegitimize even the middle ground in Pakistan.

For moderate forces to have the best chance in that nuclear-armed nation, the United States, paradoxically, should refrain from supporting them, and stay out of Pakistani politics.

Instead of taking its eye off the ball and continuing to take actions that make radical Islamism and anti-U.S. terrorism worse, the Bush administration should content itself with obtaining better intelligence on the whereabouts of bin Laden and his associates. If such information is found, the United States should take quiet, unilateral action to capture or kill them.

Ivan Eland is Director of the Center on Peace & Liberty at The Independent Institute and Assistant Editor of The Independent Review. Dr. Eland has been Director of Defense Policy Studies at the Cato Institute, Principal Defense Analyst at the Congressional Budget Office, Evaluator-in-Charge (national security and intelligence) for the U.S. General Accounting Office, and Investigator for the House Foreign Affairs Committee.

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