Unprecedented Peril Forces Tough Calls

Still, Tenet held his silence on Khan. Conversations with U.S. officials were so elliptical at the time, a high-ranking Pakistani official said, that "we wondered if maybe the real American motive here was to just learn more about our [nuclear] capabilities." He added, "We weren't going to give them any kind of information on that."

March 2002 brought the first intelligence assessments that Khan had moved his base outside Pakistan, that he controlled the business through associates in Dubai and had "established his own production facilities, in Malaysia," according to a British government accounting. The same British report, by the Butler Committee, said the Joint Intelligence Committee reported new concerns in July 2002 that Khan might be selling the means "to build nuclear warheads."

Blair's government argued with increasing vigor, officials of both countries said, that it was time to confront Pakistan about Khan and stop the operation of his network.

"We disagreed," said a senior U.S. policymaker, who would not permit quotation by name on the dispute between allies. Moving immediately, he said, would have closed opportunities for covert surveillance.

Khan continued moving freely abroad, evading nominal restrictions. On a trip to Beijing, one senior Pakistani diplomat said, Chinese authorities "took me aside, said they knew it would be embarrassing, but A.Q. Khan was in China and bribing people, and they wanted him out." The diplomat said Pakistan confiscated a false passport, but Khan kept traveling.

"They made no attempt to get a handle on his activities abroad," said John Wolf, who was Bush's assistant secretary of state for nonproliferation until June.

Bolton said Bush's advisers "were continually engaged in a trade-off" between stopping the sales of nuclear technology and learning enough about them "so that when we did move we brought down what we could."

"It was a 51-49 call every day we were going through this," he said.

It was that unhappy discovery, made in two stages in July and September 2002, that forced North Korea back onto Bush's agenda when he was trying to keep the world's focus on Iraq.

Until then, North Korea was believed to be a nuclear power with "one or possibly two" weapons and no immediate route to more, according to declassified CIA reports. Its existing arsenal had been built with plutonium from a nuclear power plant. In 1994, Clinton neared the brink of war to prevent North Korea from extracting more plutonium from spent reactor fuel. Instead North Korea agreed to shut down its reactors and leave the spent fuel -- enough for five or six bombs -- under U.N. seal, in return for energy and food aid from the United States, South Korea and Japan.

U.S. intelligence agencies knew North Korea was working to circumvent that agreement by acquiring technology to enrich uranium, the alternative ingredient for a bomb. But as recently as June 2002, a National Intelligence Estimate judged it would be three years or more before the Pyongyang government could assemble gas centrifuges in a small test cascade.

By September, U.S. officials said, the CIA reached the dismaying conclusion that a "production-scale" centrifuge facility was nearly complete. "It was much more advanced then anyone expected," said a White House official who followed the subject closely.