Afghan diplomat abducted in Pakistan; worry grows

British Airways said it had suspended flights to Pakistan because of security fears after the Saturday evening truck-bomb attack on Islamabad's Marriott Hotel.

The Czech ambassador and at least three other foreigners were among those killed in the blast, Islamabad's worst bomb attack, which wounded 266 people and which security officials said bore the hallmarks of al Qaeda.

There has been no claim of responsibility but the government said it expected the investigation would lead to al Qaeda and Taliban militants in the Federally Administered Tribal Areas on the Afghan border.

Interior Ministry chief Rehman Malik said President Asif Ali Zardari, as well as the prime minister and army commander, had been due to attend a dinner at the hotel on Saturday night but the venue was changed on the prime minister's advice.

The beleaguered Pakistani rupee sank to a new low, trading at 78.55 to the dollar before closing at 78.21/28. The rupee has lost 21.2 percent against the dollar this year.

The blast reinforced investors' negative attitudes after months of political uncertainty, a currency dealer said.

The Afghan consul general in Peshawar was kidnapped after gunmen ambushed his car and killed his driver. Gunmen opened fire on a U.S. diplomat in the city last month.

"Masked gunmen intercepted his vehicle and took him away after killing his driver," said consulate official Noor Mohammad Takal. "It's a very serious incident. The Pakistani government needs to give security to diplomats."

Shortly before the attack in Peshawar, a British Airways spokesman said the airline had suspended its six flights a week to Pakistan while the company reviewed security.

"END MILITARY INTERVENTION"
The hotel bombing has raised fresh calls for Pakistan's government to rethink its alliance with the United States and military operations against Islamist militants, which many Pakistanis blame for inciting violence.

Pakistan's army is in the midst of an offensive against militants in the Bajaur region on the Afghan border, while the United States has intensified attacks on militants on the Pakistani side of the border, infuriating the Pakistani army.

A security official said troops had fired at two U.S. helicopters that intruded into Pakistani air space on Sunday night, forcing them back to Afghanistan.

Troops were attacking militant hideouts in the Bajaur region where the government says more than 600 militants have been killed in fighting since August.

But a senior opposition politician, former Prime Minister Nawaz Sharif, said the government should reject U.S. pressure to fight militants, halt offensives and "sit down at the same table" and negotiate peace.

"The government must immediately end any military intervention in the tribal areas," Sharif said in an interview with Italy's La Repubblica newspaper.

"I condemn the Marriott attack, but condemnation is not sufficient to straighten things out. We must avoid the pressures of the United States and think for ourselves," he said.

FOREIGNERS KILLED
Islamabad police chief Asghar Raza Gardezi said no arrests had been made in connection with Saturday's blast.

Among the foreigners killed were a Vietnamese woman and two members of the U.S. armed forces assigned to the U.S. embassy.

A U.S. State Department employee was unaccounted for and Denmark's security service said one of its staff, attached to the Danish mission, was missing and presumed dead.

The Interior Ministry said 11 foreigners were among the wounded after the bomber blew up a truck packed with 600 kg (1,320 lb) of explosives, including artillery shells.

A political analyst said, despite skepticism about security policy, the severity of Saturday's bombing should have convinced more people the military was not just fighting America's war.

"Your state is being challenged and people are coming and killing innocent people ... what do you negotiate with them?" said Shafqat Mahmood, a former government minister and analyst.

Authorities could take advantage of anger over the attack, he said. "This is a popular government not a military government; it has support among the people.

They can mobilize their support for fighting real challenges," he said.

Financial analysts said the bombing would be a blow for foreign investment but not a severe one unless it marked the beginning of a new phase of violence.

"In the near-term, investor sentiment, which is already running weak, will be further dented," said Asif Qureshi, head of research at Invisor Securities Ltd.

The cost of buying protection on debt from Pakistan rose after the attack. A five-year CDS (credit default swap) was not traded but a dealer said it was quoted at 1,500 basis points, about 50 bps wider than Friday.

Photo: Reuters