The killing of Osama bin Laden was an important success, but it raises vital strategic questions about Pakistan and our policy towards it.

The fact that bin Laden lived in a luxury compound one thousand yards from Pakistan’s national military academy and thirty miles from the capital city of Islamabad raises disturbing questions about the possible nexus between Pakistan’s security apparatus, al-Qaeda and other Islamic extremists.

After 9/11, President Bush declared that Pakistan must choose sides in the war on terrorism—either with us or against us. The administration delivered non-negotiable demands calling on Pakistan to cease its support for the Taliban regime and cooperate with the U.S.-led mission in Afghanistan. Pakistani president Musharraf initially acquiesced.

After the fall of the Taliban regime, however, the Bush administration prodded Pakistan for further cooperation through positive inducements and occasional pressure. It lifted sanctions that had been imposed on Pakistan for its nuclear program, eased pressure on the regime to democratize, and provided more than $11 billion in aid. Over 70 percent of American aid to Pakistan during the Bush years was security-related, focused on improving Pakistan’s counterterrorism capabilities. It also pressured Pakistan to move against extremists—particularly al-Qaeda.

Pakistan reciprocated with haphazard cooperation. It helped with transit routes and logistics in Afghanistan, though always in exchange for money. Its intelligence agency—the Inter Services Intelligence (ISI)—cooperated at times in capturing al-Qaeda operatives such as 9/11’s mastermind, Khalid Sheikh Mohammad, and moved against anti-Pakistan Taliban at significant cost. But Pakistan's security institutions also worked against us by providing sanctuary and active support for the Taliban, Haqqani network, and other insurgent groups with different degrees of linkage to al-Qaeda.

The Obama administration basically retained the strategy of its predecessor, though it increased pressure on Pakistan in two important ways. First, it accelerated drone attacks and other activities against al-Qaeda and various extremists inside Pakistan’s borders. Second, it increased U.S. assistance to Pakistan and adjusted its aid by increasing funding for economic and development initiatives.

As in the case of the Bush administration, the Obama administration’s approach has not been decisive enough to produce a fundamental change in Pakistani policy. Islamabad wants to keep the pipeline of American assistance flowing while limiting U.S. anti-terror operations in Pakistan, particularly the drone attacks. It is also escalating pressure on U.S. forces in Afghanistan by, among other things, allowing factories to operate in places like Chaman that are producing improvised explosive devices designed to maim the legs and genital areas of soldiers. Its overall design seeks to turn its neighbor into a Pakistani satrapy.

Now, there may be an opportunity to bring about a change in Pakistani policy with respect to cooperating more fully with the United States. The raid against bin Laden’s compound has put Pakistan on the defensive. With evidence likely to emerge that the Pakistani military may have shielded bin Laden, Pakistani leaders may be more susceptible to American pressure than they have been at any time since immediately after 9/11.

We should therefore adopt a three-step strategy:

First, we should discuss the evidence and related issues with Pakistani leaders through official channels and demand the elimination of the remaining al-Qaeda leadership in Pakistan—either by arresting them and turning them over to the United States or by sharing information with Washington and allowing U.S. Special Forces (which have acquired amazing capabilities to move against specific targets) to operate against these terrorists. We should also push for the elimination of IED factories and signal that we would take direct measures ourselves if Pakistan does not act. As for the Afghan insurgents, Pakistan provides them with sanctuary and has enormous influence over the Taliban and the Haqqani network. We need to get Pakistan to cooperate with us and with Afghanistan to stop support for the Haqqani network, an al-Qaeda ally, and to embrace a constructive approach to an agreement ending the Afghan dispute and an agreement with the Taliban.

An agreement along these lines would be the best outcome, though it would have to be structured to ensure timely Pakistani action to fulfill its obligations. Pending agreement on these points, the administration should consider looking closely at security-related assistance. Coalition support funds—which reimburse the Pakistani military for counterterrorism operations and constitute a significant subsidy for its operating budget—should be adjusted. Payments should be linked to performance and achievement of established milestones.

It is possible that Pakistan might cooperate with this approach. Given Pakistan's importance for our efforts in Afghanistan, the security of its nuclear weapons and threat of extremism, what do we do if Islamabad remains obstinate? In such a situation the Obama administration would to well to consider a calibrated increase in pressure on Pakistan. We could expose information that we already have and are likely to obtain on Pakistan’s conduct in relations to terrorists, including Bin Laden and others. This rollout could be accompanied by demands for an international investigation into the relationship between the Pakistani regime and the entire range of militant groups that it harbors and supports—al-Qaeda, the Taliban, the Haqqani network and other extremist and terrorist groups. Also, the Obama administration might expand its policy of unilateral air or Special Forces strikes to cover the leadership and sanctuaries of insurgents operating against us in Afghanistan.

The United States has myriad points of leverage that we should keep in reserve. These include blocking IMF funding that is crucial for Pakistan’s economic stability. The administration can designate Pakistan as a state sponsor of terrorism and raise the issue in front of the Security Council and other international forums. And it can also bolster ties with Pakistan’s chief rival, India. All of these steps are risky and should be exercised only in the most extreme of circumstances.

Given Pakistan's importance, the United States needs to continue, adjust and expand efforts to win over the Pakistani people. One area of expanded effort should be the empowerment of Pakistan’s civil society through a combination of aid, public diplomacy, and programs aimed at strengthening democracy, human rights, and the rule of law. Economically, it should pay greater attention to the country’s rampant corruption, high unemployment rate among young people, and dearth of investment in infrastructure and education.

Pakistan is important. The United States does not need Pakistan as an enemy. Pakistani leaders should fear hostile relations with Washington. Pakistan has acted both as our friend and as our adversary. In the current crisis of confidence, there may be an opportunity—if Islamabad makes a fundamental break from extremism and terrorism. Such a change would be the most consequential effect of the raid on bin Laden compound.