In October 1994, a gleeful young kidnapper walked into a house in Saharanpur, north of New Delhi, to tell three British tourists chained to the floor that he had sent authorities an ultimatum: Release a group of Islamic militants from Indian jails, or the hostages will die.

''We've just told the press we're going to behead you,'' said Ahmed Omar Sheikh, a 21-year-old who once studied at the London School of Economics, as Rhys Partridge, one of the hostages, remembered it. ''He was laughing,'' Mr. Partridge said in a recent interview. ''The prospect excited him.''

Mr. Sheikh's plans went awry when he was captured and his captives released. But after five years awaiting trial, he was freed, along with two other Islamic militants, in exchange for more than 160 people aboard an Indian Airlines jet that had been hijacked from Katmandu, Nepal.

Mr. Partridge was aghast. ''I got to know the guy and I got to know his agenda, and I made it very apparent to anyone who would listen that he would continue to do this kind of stuff,'' he said. ''He would take hostages again. He would murder people, given the opportunity.''

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The opportunity may have presented itself last month when Mr. Sheikh, now 28 and close to a Pakistani militant group known as the Army of Muhammad, apparently enticed a Wall Street Journal reporter, Daniel Pearl, to a meeting that led to his abduction on Jan. 23 and brutal execution.

Pakistan's president, Pervez Musharraf, has vowed to prosecute everyone involved, an inquiry that could well raise the lid on one of the more unsavory chapters in this country's recent history: the ties between radical Islamic groups and Pakistan's main intelligence service.

Pakistani military and intelligence officials with knowledge of the events disclosed that a Pakistani intelligence officer played a key role in nurturing the Army of Muhammad after its formation in 2000 and also helped facilitate Mr. Sheikh's frequent travels between Afghanistan and Pakistan, his ancestral home.

That intelligence officer, Brigadier Abdullah, who uses one name, was among those who were pushed aside late last year as President Musharraf began his shake-up of the country's powerful and secretive spy service, known as Inter-Services Intelligence, or I.S.I.

Mr. Sheikh told a Pakistani court earlier this month and American and Pakistani interrogators that he helped kidnap Mr. Pearl. But his statements raised as many questions as they answered. Did he act with accomplices and, if so, was a former Pakistani police official among them, as some say? Was someone giving orders to him? If so, why have they not been apprehended? Why was Mr. Sheikh allowed to turn himself in to a former Inter-Services Intelligence agency official on Feb. 5, and why did the local police issue misleading statements for a week indicating that he was still at large?

The intelligence agency's past actions indicate that its interests -- or, at a minimum, those of former agency officials -- have often dovetailed with the interests of Mr. Pearl's kidnappers, as reflected in their original demands. New disclosures of links between Mr. Sheikh and two recently dismissed agency officials only intensify suspicions about the its role in this case.

The intelligence agency came to prominence during the Soviet Union's invasion of Afghanistan, when it served as the C.I.A.'s paymaster, funneling billions of dollars in covert aid to the Afghan rebels. More recently, it has been the main instrument of Pakistan's covert policies in the region, cultivating close ties with the Taliban rulers of Afghanistan and with radical Islamic groups seeking to lay claim to the Indian provinces of Jammu and Kashmir.

When Mr. Sheikh was freed from an Indian prison in 1999, he and two other freed prisoners became affiliated with the newly minted group, the Army of Muhammad. It was one of several militant groups with close links to Pakistani intelligence, particularly to Brigadier Abdullah, who headed Inter-Services Intelligence's Kashmir department.

All this raises a delicate issue for President Musharraf and also for the United States, which has forged a much closer relationship with Pakistan since Sept. 11. Two days before the kidnapping of Mr. Pearl, the American ambassador in Islamabad asked Pakistan to hand over Mr. Sheikh in connection with the 1994 kidnapping, in which an American was also held captive. Before Pakistan did anything, Mr. Pearl was abducted.

Not surprisingly, India is pointing the finger at Pakistan.

The Indian foreign minister, Jaswant Singh, who accompanied Mr. Sheikh and two other Islamic militants to Kandahar, Afghanistan, in exchange for the release of the passengers aboard the hijacked jetliner, told the Spanish newspaper El Mundo last week that ''Omar was allowed to live peacefully in Pakistan till he kidnapped another American. But I do not want to sound bitter.''

In Pakistan, an editorial in the English language newspaper, The News, raised much the same question this weekend. ''Any doubts about incompetence or deliberate mishandling of the Pearl case, or similar cases in the future, will have to be removed.''

Enlisting Militancy

Pakistani Intelligence Fuels a Guerrilla War

During the 1980's, Inter-Services Intelligence became Pakistan's most influential political and foreign policy force. At the time, its operatives were allowed extraordinary leeway in forging contacts with Islamic militants in Afghanistan and in the disputed territory of Kashmir, according to senior Pakistani officials and a broad range of published accounts, including the book, ''Holy War Inc.'' (Simon & Schuster: 2001), which details these contacts; the author is Peter L. Bergen, a terrorism analyst on CNN.

After the Soviet Union withdrew from Afghanistan in 1989, the onset of a guerrilla war in Kashmir gave the agency a politically more potent reason for being -- as the force to nurture a guerrilla conflict against India, through the proxy of militant Islamic groups.

The United States government grew increasingly concerned about the activities of its former partner. That year, in a confidential letter to Nawaz Sharif, then Pakistan's prime minister, President George Bush quietly warned that he might have to declare Pakistan a terrorist state if the cross-border attacks into India, paid for and orchestrated by Inter-Services Intelligence, did not cease, according to a former Pakistani official who said he has seen the letter.

The rise of the Taliban only added to that Pakistani-American gulf. While the United States soured on the force, Pakistan, through its intelligence agency, helped sustain it, solidifying links built on kinship, Islamic solidarity and longstanding personal and institutional allegiance.

Similar ties were being forged with various militant groups based in Pakistan, who were recruiting young Muslim men to join them. Mr. Sheikh, who at 19 had been radicalized when he learned of the atrocities against Bosnian Muslims, was ripe for recruitment. In the spring of his first year at the London School of Economics, he went on a relief mission to Bosnia.

He described the recruitment in a diary entry, verified by his attorney and written while in prison in India awaiting trial for the 1994 kidnappings:

''April 93. Go with Convoy of Mercy up to Split in Croatia. Too ill to accompany them into Bosnia. Meet Mujahedeen going into Bosnia who recommend training in Afghanistan first. Back for England with recommendation letter from Abdur Rauf for Harkat ul-Mujahedeen. Try to get back into academic to prepare for exams. Still attending talks by various groups. Can't settle down. Leave for Pakistan. Go to Lahore office of Harkat ul-Mujahedeen.''

Harkat ul-Mujahedeen was a Pakistan-based group whose aim was ending Indian rule in Kashmir.

After some travel and training in Afghanistan, Mr. Sheikh was given an assignment: kidnap American, British and French tourists who could be traded for the freedom of Maulana Masood Azhar, the Harkat leader jailed by the Indian government in 1994.

Mr. Sheikh lured Mr. Partridge into captivity in September of that year; two other Britons were taken two weeks later. In late October, an American, Bela Nuss, became the fourth hostage, held at a separate house.

Mr. Sheikh, an impetuous young man who, according to the diary, annoyed superiors by overstepping his mandate, was not successful in the operation. Indian police stumbled onto the plot, arrested Mr. Sheikh, and freed both Mr. Nuss and the British hostages.

In prison, Mr. Sheikh met Mr. Azhar, the man he had hoped to free.

Indian officials say the two men were in Tihar prison for almost two years. ''They became thick friends in Tihar,'' said an Indian intelligence officer who interviewed both men.

''Masood Azhar would use religion as a tool to influence people,'' he said. ''But this fellow Omar Sheikh was a very sharp boy. He studied a mind and thought how he could manipulate you. He didn't use religion.''

Mr. Sheikh and Mr. Azhar and a third man were freed after the 1999 hijacking.

On the Move

Out of Prison, Out of the Spotlight

As early as January 2000, Pakistani military officers say, Mr. Azhar formed a new group, The Army of Muhammad (or Jaish-e-Muhammad).

Mr. Azhar, then 32 years old, returned to Pakistan to renew his angry call for jihad in Kashmir at raucous rallies in the port city of Karachi.

Mr. Azhar's high-profile role soon ran afoul of Pakistani authorities, particularly General Musharraf, who had taken power in late 1999. By December 2001, Mr. Azhar was under house arrest.

Much less is known about Mr. Sheikh. For instance, he was not listed in any official Pakistani records as having returned from Afghanistan, where he was sent after being freed from jail, according to Pakistani officials.

Mr. Sheikh apparently did spend much time in Afghanistan, a base for the Kashmir militants. But he did not steer clear of Pakistan. He was spotted by Indian intelligence on a number of occasions, according to senior Indian officials, including once in early 2001, at a bookstore in Islamabad, the capital.

The Indian officials say they believe that he traveled frequently, with his new wife and infant son, to Lahore, where his parents had been born and relatives still lived. According to two Pakistani military officials, officers of a smaller, less powerful intelligence agency, the Military Intelligence Branch, then headed by Lt. Gen. Ehsanul Haq, had urged caution in allowing Mr. Sheikh to return, fearing that his years in an Indian jail might have turned him into an enemy agent.

To explain his apparent ease of travel, the officials suggested that Mr. Sheikh may have drawn on clandestine contacts with the former Inter-Services Intelligence officer known as Brigadier Abdullah, the head of the Kashmir cell, and, some now speculate, also with Brig. Ejaz Shah. He is a former agency official who had become home secretary in the Punjab, Mr. Sheikh's native province.

Mr. Sheikh's growing profile among Islamic militants did not go unnoticed in the West. A year ago, the American and British governments seemed interested in taking him out of circulation, or so Rhys Partridge and Bela Nuss, two of the 1994 hostages, say they were told when they were questioned by British and F.B.I. agents.

The F.B.I. agents indicated that the former hostages would be giving evidence to a grand jury in the United States last spring, but then backed off, saying they were not needed.

It is unclear whether Mr. Sheikh was ever indicted in the United States. But a request last month that Pakistan turn over Mr. Sheikh would most likely have been made only if there were outstanding charges against Mr. Sheikh in the United States.

In January in Karachi, according to Mr. Sheikh's own courtroom statements, he replayed his role as a kidnapper. So far, three other suspects have been charged in the Pearl case, and investigators say that all have identified Mr. Sheikh as the man who directed them to send e-mail messages to Western news organizations that included photographs of the reporter in captivity. At least five others are being sought, Pakistani officials say.

Cracking Down

Pakistan's President Tackles Radicalism

Even as he pledges to find the rest of the kidnappers, President Musharraf is pursuing a broader crackdown on militants, promised in January, with 2,000 arrests announced so far. The purpose is to rein in the Islamic extremist organizations that Pakistan had condoned or supported over the years. And within Inter-Services Intelligence, he has begun what military and intelligence officials describe as a major purge, including the effective dismantling of the Kashmir and Afghanistan cells.

One of the first to go, according to those officers, was the commander known as Brigadier Abdullah, the head of the Kashmir cell who helped forge ties with the Army of Muhammad and, those officers assert, helped facilitate Mr. Sheikh's travels between Afghanistan and Pakisan.

The overlapping of the crackdown, the intelligence purge, and Mr. Pearl's murder have added to the mystery surrounding the crime, including the question of whether it might have been carried out with the knowledge or support of current or former Pakistani intelligence officials.

At least so far, there has been no indication that Mr. Azhar, the Army of Muhammad leader who returned so quickly to Pakistan, played any role in the kidnapping. He has remained under house arrest.

But one of the four suspects now in police custody for the kidnapping has been identified as Sheikh Mohammad Adeel, a former constable in a special branch of the Karachi police that had responsibility for terrorism. And even today, no one in authority has resolved conflicting accounts of where Mr. Sheikh was between Feb. 5, when he has said he turned himself in, and Feb. 12, when his arrest was announced.

During the intervening week, Pakistani police officials gave optimistic interviews indicating that they were on the verge of capturing Mr. Sheikh.

But this weekend, two Pakistani law enforcement officials, confirmed that Mr. Sheikh had turned himself in on Feb. 5 to Brigadier Shah, the Punjab home secretary and former I.S.I. official. It is not clear why news of his surrender was kept quiet for a week while Pakistani police said the hunt for Mr. Sheikh continued.

The arrest of Mr. Sheikh was announced at the time of General Musharraf's visit to Washington, a full week after he was taken into custody.

If Pakistani officials' decision to let him surrender was part of some attempt to seek a negotiated handover of Mr. Pearl, it failed. On Feb. 1, Mr. Sheikh had received a coded message from his confederates telling him that Mr. Pearl was already dead, according to the account that he has given to his interrogators in Karachi and which they now regard as credible.

The days-long negotiations, some Pakistani investigators now say, may have been a delaying tactic to allow Mr. Sheikh's associates to escape.

In an interview, the American Ambassador to Pakistan, Wendy Chamberlin, went out of her way to praise Pakistan for leading the effort to find those responsible for Mr. Pearl's abduction and murder.

''Cooperation has been extremely good, and the Pakistani authorities are showing much aggressiveness as we proceed,'' she said on Friday. State Department officials in Washington echoed that sentiment.

If there was any kind of collusion between operatives and militants, Pakistani intelligence officials now insist, it would almost certainly have involved former I.S.I. officers, rather than those now serving under General Ehsan, who was formerly the director of Military Intelligence. General Musharraf installed him as the Inter-Services Intelligence chief last fall with a mandate to sever ties to terrorist groups.

But after so many years of tangled ties between Pakistan's government and the militants, few in Pakistan even now claim to understand the full picture, and they say that the murder of Mr. Pearl has only underscored how fraught the situation remains.

''Our journey is not a short one to control the terrorists,'' the interior minister, Moinuddin Haider, said this week.

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