Pakistan's President Pervez Musharraf has become a close ally of the Bush administration in its war against terrorism, but he made clear last week that he has some policy disagreements with the current White House. In a wide-ranging interview with Newsweek-Washington Post's Lally Weymouth, Musharraf said that the United States and Great Britain must withdraw their troops from Iraq. Musharraf, who was in New York for the annual ministerial meeting at the United Nations, also argued vehemently that the Palestinian issue is the root cause of anti-U.S. feelings in the Middle East and of terrorism. Excerpts:

Weymouth: You have said you will not resign as army chief of staff at the end of this year. Why?

Musharraf: I haven't said I won't take off the uniform. I have yet to decide. I would like to give you the reasons. The international and domestic environments are complex. We are following a foreign policy that needs continuity. We are fighting terrorism internationally, and that needs continuity. Then, there is the issue of Indo-Pakistan relations. There is a rapprochement. There is hope for a resolution of disputes [with India]. Then, we are changing the entire psyche of our society, which has been held hostage to extremist ideas. The vast majority are moderate, but they were voiceless. The entire mindset needs to be changed, which we are doing . . .

Were military officers involved in the assassination attempts against you and your prime minister? Have terrorists penetrated your army?

There is involvement of some few lower-level people, but there are no officers involved.

Who is carrying out these attempts?

There are dozens of terrorist groups that have sprung up in the past two decades. One needs to confront them and bring them down. They are on the periphery of Pakistani society, so we can easily fight them. But a change in culture is required.

U.S. officials contend that terrorist groups are still raising money and recruiting in Pakistan under different names in spite of your ban. To what extent are you willing to crush domestic terrorism?

We are cracking down in all possible ways. They are banned, and as far as recruitment, that is also totally banned. Groups may do it clandestinely but previously they had offices and recruiting centers all over. Their accounts have been frozen and offices sealed.

Aren't these groups a danger to you?

Yes, indeed, they are a danger. They are well armed and well trained and have no lack of resources. But I can face them.

Do these groups have ties to al Qaeda?

Within these extremist groups are masterminds, invariably from al Qaeda. [The masterminds] get an extremist Pakistani to plan operations and recruit people. Therefore, we are hitting the masterminds so that we dry up the planner.

Did you and President Bush decide on any plan of action against al Qaeda during your meeting last week?

We are in constant contact, and we cooperate on the intelligence side. President Bush knows what is happening. The strategy is coordinated. The meeting was just a review of the world situation, but there is a total understanding [between us].

Do you believe the new Indian prime minister is as committed to peace as former Prime Minister [Atal Bihari] Vajpayee?

I think he is very interested in peace. I have no reasons to doubt his sincerity.

Talks between India and Pakistan have gone on for three months. How do you assess the current state of play and what do you hope to accomplish on your dispute over Kashmir?

We won't be able to move toward a solution in the first meeting. It is just to develop an understanding of each other. All that we can expect is to set a direction for ourselves for the future and be sure of the sincerity of each side toward the resolution of disputes.

Do you expect that India will give up territory?

I won't comment on that now. We need to get into the resolution of the dispute later. The solution lies in its acceptability to the peoples of India, Pakistan and Kashmir.

How do you respond to charges by Indians that there has been a surge in cross-border movement by terrorist groups operating out of Pakistan?

We do not accept these accusations. We also keep saying there are human rights violations in [Indian-controlled] Kashmir.

How do you see Pakistan's strategic interests in Afghanistan?

We have a common history, culture and faith. Afghanistan is landlocked, and we look toward the sea. So we have mutual strategic and economic interests.

[Afghan] President [Hamid] Karzai has complained that Pakistan has not been tough enough on al Qaeda and Taliban enclaves along the Afghan-Pakistani border, and that these groups have moved from Pakistan into Afghanistan. What is your response?

We strongly condemn any statements of this nature. . . . We will not allow al Qaeda or Taliban to operate from Pakistan. But the borders are mountainous and porous and it is impossible to control the whole border. There is a possibility of people moving from this side -- that cannot be denied.

Do you think the U.S. needs more troops in Afghanistan to finish the job?

More troops were required initially. I've always said that there are about 12 or 13 power centers in Afghanistan that need to be manned to reduce the power of the warlords. That did not happen. Now, we have reached a stage where an Afghan national army is being raised. I think the correct thing would be to speed up the process of building that army. They have raised about 13,500, and they need over 50,000 troops. Then, this army could go and occupy these power centers and man the border posts. The visibility of foreign troops ought to be reduced and ultimately, they need to exit.

What is your assessment of U.S. operations in Iraq?

I think foreign troops -- whether American or British -- are not at all welcome in Iraq. Nobody [in the Muslim world] likes foreign troops. Therefore, their visibility must be reduced. The answer lies not in bringing in more foreign troops but in raising the army in Iraq itself so it can take over security and law and order, so that you can exit. Everything should lead to an exit strategy. After foreign troops have exited, if the government of Iraq asks for assistance from the Muslim world, it may agree to help out Iraq.

Have you talked to President Bush and [Iraqi] Prime Minister [Ayad] Allawi about an exit strategy for U.S. and British troops?

Yes, both agree that Iraqi forces should be raised. But where to get the forces from is the question.

Would Pakistan be willing to train troops now for Iraq?

Yes, we have offered.

Would you send troops to Iraq now?

No, not under the present circumstances.

Do you think the war in Iraq was a good idea, and how do you think it has affected the area?

I think it has complicated the situation in the Islamic world. It has increased the opposition to the U.S. in the Islamic world.

What can be done about this?

Close down fronts. You have opened too many fronts, [such as] the Palestinian front. The Palestinian front is affecting the entire Muslim world. All terrorist and militant activity in the world today has been initiated because of the Palestinian problem. Who do you think is carrying out the suicide attacks? This is because of the sense of hopelessness, alienation and powerlessness. Who gave rise to Hamas and Hezbollah? They are all a result of the Palestinian conflict.

If Israel gave the Palestinians what they wanted, do you believe the conflict would stop?

Yes, it would wind down. If the road map were executed on both sides, the Muslim world would recognize its rights.

Do you believe the aim of al Qaeda is to overthrow the moderate governments in Egypt and Saudi Arabia and, for that matter, any Muslim government brave enough to support the West? Doesn't Osama bin Laden aim to put radical governments in moderate Muslim countries?

If you examine how al Qaeda came into existence, you'll find that the root is the Palestinian struggle. As for 9/11, the start point happens to be the Palestinian struggle.

Do you believe that governments like yours, which have the courage to support the West, are viewed as traitors by radical Islamic groups?

Yes. The extremists dislike me because I'm operating against them.

Polls show that a majority in the Muslim world like bin Laden -- that he is perceived as defending the faith against non-Muslim intruders, especially Christians and Jews.

He has a mass popularity, but whatever action I am taking has mass support. The people of Pakistan are with me on whatever we are doing against al Qaeda. But when Osama bin Laden talks about what is happening in Palestine, they are more in his favor than in favor of the U.S.

Do you think bin Laden can be captured?

We don't know where he is.

Is he alive?

Most likely, almost certainly.

What is the most vital intelligence you have gotten from the al Qaeda members you have arrested?

The valuable information is [knowledge of] their hierarchy of leadership, and we have learned of their presence in many countries. We have provided this information from interrogating suspects.

Is al Qaeda on the run?

Yes, they are on the run.