Pakistan has deployed 1,500 paramilitary troops to protect Peshawar, the provincial capital of the Northwest Frontier Province that many fear could soon fall to the Taliban.
As Pakistan moved in its forces, it also bombarded suspected militant hideouts with mortar shells, The Associated Press reported.
Islamic militants and criminal gangs have taken advantage of a leadership void in Islamabad to expand their activities rapidly in recent weeks, according to security officials, analysts and terrorized residents.
"I am really alarmed by the way things are moving," said Lt. Gen. Talat Massood, a former defense secretary. "It's not just creeping Talibanization. Now it's rapidly advancing."
This week alone, militants held a public execution before thousands of cheering supporters torched the country's only ski resort and threatened music shop owners with dire consequences if they didn't close down.
They bombed schools for girls, and even held a march in an upscale Peshawar suburb, warning women not to come out on the streets.
Frontier residents also complain of a rising tide of violent crime: roadside banditry, rape, extortion and kidnapping. Even Pakistan's ambassador to Afghanistan was kidnapped and held for ransom by militants who snatched him on the outskirts of Peshawar.
Pakistan's Federally Administered Tribal Areas, a semiautonomous region that buffers the Afghan border, has been wracked by militant violence since 2006. It surged into the so-called "settled" regions of the frontier in recent months, and its rapid spread across the Northwest Frontier Province has alarmed many.
Analysts say it's not that the Taliban — and allied criminal groups working with them — are so strong, but that Pakistan's government, elected in February, is so weak and indecisive.
"The strength of the militants is worrisome, but the lack of governance is now critical," said author Ahmed Rashid, whose latest book "Descent in Chaos" portrays a Pakistan spinning out of control.
Even Fazl-ur-Rehman, a pro-Taliban cleric and member of parliament, told the National Assembly this week he believes the entire frontier province could for the first time soon fall into the hands of the Taliban.
A senior provincial security official told ABC News he didn't even think police and paramilitary forces could defend Peshawar if the Taliban entered the teeming city.
"If they decide to walk into this metropolis, we don't have the force to stop them," said the official, who spoke on condition of anonymity because he is not authorized to comment to the media. "Law and order is nonexistent and our security forces are tired and have no will to fight."
Under the previous regime of President Pervez Musharraf, the Pakistan military battled the militants, a policy which sparked a wave of terrorist violence across the country.
When the present government took power in March, its leaders pledged conciliation over confrontation.
However, security officials and local residents in the frontier province said there are now so many militant groups and criminal gangs operating that would be impossible to forge inclusive and lasting peace deals with all of them.
Deals inked with militants in the scenic Swat Valley and in the troubled South Waziristan district of the tribal belt appeared to be in jeopardy this week after members of the Taliban Movement of Pakistan, known by its Urdu language acronym TTP, killed more than two dozen members of a pro-government peace committee on Wednesday.
The dead bodies were found dumped along the road either shot or with their throats slit, brutal killings that shocked this nation of 170 million where there had been overwhelming support for talks with the Taliban.
Maulvi Umar, a spokesman for the TTP, described the dead, all members of a rival tribe, as "criminals."
Among ordinary Pakistanis there is concern that a return to military action against the militants could spark renewed terrorist violence here. Suicide bombings left hundreds dead in 2007, most famously the former Prime Minister Benazir Bhutto, who was campaigning on a platform to end extremism.
Her party swept to power following her death on Dec. 27, but many western officials describe a leadership void in Islamabad where party leaders in the ruling coalition have dithered for three months over proposals to impeach President Musharraf and debated whether to restore Supreme Court judges the former military ruler sacked last March.
Soaring food and fuel prices have sparked street protests and sent the Pakistani rupee into a tailspin. Federal officials have issued conflicting statements about their plans for solving the myriad problems and launched no initiatives to actually do so.
Washington is worried about the state of drift. U.S. Defense Secretary Robert Gates has blamed Islamabad's inaction on a 40 percent increase in violence across the border in Afghanistan where more than 30,000 U.S. troops are fighting as part of the NATO-led Coalition.
"The ability of the Taliban and other insurgents to cross that border and not being under any pressure from the Pakistani side of the border is clearly a concern," he said this week.
On Wednesday, the federal government appeared to concede negotiations weren't working. The federal cabinet handed responsibility for quelling militancy back to the Pakistan military, authorizing the military chief Gen. Ashfaq Kayani to tackle problems in the northwest as he saw fit.
Western officials also worry Islamabad's inaction has given foreign militants space to grow stronger, and fear al Qaeda fugitives hiding out in the tribal areas are plotting fresh attacks against the West.
Of most concern is the rapid advance of the Taliban across nuclear-armed Pakistan.
"I am gravely worried about the future of this country," said Massood, the former defense secretary. "There has to be military action taken with support of the people, or before long, we will not be able to stop this."