ISLAMABAD: The discovery of Osama bin Laden in Pakistan has forced Islamabad on to the defensive and gives the United States perhaps more leverage over its supposed ally than it has had in decades.

After years of denials and expressions of ignorance when it came to al Qaeda leader Osama bin Laden, Pakistan now faces international scrutiny after the mastermind of the September 11, 2001, attacks was killed in the military town of Abbottabad just 50 km northeast of the capital by a US special forces team on Monday.

"It would appear the US has an enhanced amount of leverage right now," a Western diplomat in Islamabad told Reuters. "But the important point at this early stage is that it takes two to tango. And it would take the Pakistani side to respond positively to United States' assertion of leverage and its laundry list of requests."

The dramatic ending to bin Laden also ended Pakistan's recent diplomatic roll in the region at the expense of the United States and its other allies.

Despite India's demands for action against Pakistani militant groups, Islamabad managed to restart peace talks without taking any action against its proxy militant groups targeting Delhi's interests.

It also managed to place senior military and intelligence officials on a joint Pakistan-Afghan committee aimed at securing a peace deal with the Afghan Taliban. This was widely seen as giving its security establishment a seat at the table and drawing Kabul deeper into Pakistan's orbit.

In both cases, the United States was left on the outside looking in with less influence over the endgame than before.

But now, with the revelation that bin Laden had been in Pakistan, hiding a stone's throw from Pakistan's military academy and possibly with the collusion of some elements of its spy agency, Pakistan's protests that it has broken with its jihad-supporting past ring hollow.

"If evidence of communications between the al Qaeda leader and Pakistani officials is discovered," writes global intelligence firm STRATFOR, "that would create an extremely ugly situation in which Washington would not be in a position to look the other way for the sake of its wider regional interests."

This has led some lawmakers in the United States to call for a re-evaluation, or even elimination, of the $3 billion in aid Pakistan receives every year to be an ally in the West's war against militancy.

At a meeting in Rome on Thursday, Secretary of State Hillary Clinton acknowledged that Washington's relationship with Islamabad was awkward at times, but said it was still important.

"It is not always an easy relationship," Clinton said. "But on the other hand it is a productive one for both our countries and we are going to continue to cooperate between our governments, our militaries, our law-enforcement agencies but most importantly between the American and Pakistani people."

So walking away from Pakistan or punishing it too harshly are not really options.

Relationship Reset

"Pakistan is a nuclear-armed state," said Senator Richard Lugar, the ranking Republican on the Senate Foreign Relations Committee. "It has a close working relationship with China, which is seeking to extend its influence throughout Asia. It frequently has been in conflict with India, with whom the United States has close relations. ... What happens along the Afghan-Pakistan border deeply affects the fate of our operations in Afghanistan."

Instead, the United States should use the increased leverage to push Pakistan for more cooperation in hunting down the remaining al Qaeda figures and successfully ending the war in Afghanistan, analysts and lawmakers say.

"We are in a unique position to reset our relationship with them," said Dutch Ruppersberger, the top Democrat on the House Intelligence Committee. "We have to sit down and reset the relationship and talk about more cooperation, and allow us to use our resources to take out bad guys."

During a hearing of the Senate Foreign Relations Committee on Thursday, Michael Krepon, director of the South Asia program at the Stimson Center think-tank, said: "The US-Pakistan relationship could not have survived this long without the presence of vital, common interests."

However, "There are some issues on which the Pakistani security apparatus is completely hard over: nuclear weapons and maintaining their equities in an Afghan settlement.

“But there are other areas where we might have leverage," he said. "And the most obvious is ... giving up (deputy al Qaeda leader Ayman) al-Zawahiri, or at least passing on actionable intelligence as to his whereabouts."

Capturing Zawahiri would be a one-two punch to al Qaeda and likely permanently puncture the group's image as able to stand up to America's superior firepower with nothing more than a Koran and a Kalashnikov.

It's unclear how that might affect the war in Afghanistan, but Pakistan would resist any moves to reduce the power of its proxies -- the Quetta Shura led by Mullah Omar and the Haqqani Network based in North Waziristan -- which it hopes to use to maintain influence in any post-war settlement.

Regardless of the opportunities for restructuring the relationship, difficult times probably lie ahead.

The civilian government has shown an increased willingness to accept Washington's demands, the Western diplomat said, which at the least likely include a foray into North Waziristan to tackle Taliban-allied militants.

"But in the establishment, no," he said.

Chief of Army Staff General Ashfaq Kayani on Thursday "made it clear that any similar action violating the sovereignty of Pakistan will warrant a review on the level of military/intelligence cooperation with the United States," the army said.

The diplomat said Kayani's tough talk may be an attempt to stake out the army's early position, but it might also be an attempt to soothe Pakistanis' wounded pride over the raid.

"We haven't heard that directly from him yet, so we have to wait and see."