Islamabad -- May 4, 2011— -- A senior Pakistani security official told ABC News that Osama bin Laden's teen daughter saw her father killed "in front of her eyes," and admitted that Pakistani intelligence failed to catch America's most wanted man, even though he was hiding in plain sight.
In an hour-long exclusive interview with ABC News, the official said all of bin Laden's relatives who were captured are cooperating with intelligence. That includes his 13-year-old daughter, who witnessed his killing, bin Laden's youngest wife, who was injured while defending him, and about 6-7 other children.
The fact that bin Laden was hiding in a relatively comfortable house was "a failure" on the part of Pakistani officials, the official admitted, but he argued that the CIA was as much to blame for taking so long to find him, despite the money and technological resources at their disposal.
The official expressed bitterness both at an operation that kept them in the dark and at comments from American officials criticizing Pakistani cooperation and competence.
"We didn't know he was there. Yes, that was an omission and we have been remiss in our duties. But if it's true he was living there for years and the U.S. had information, who's incompetent?" he said. "If anyone failed for so long, it's the CIA."
Bin Laden's sprawling compound, located in an affluent neighborhood in the scenic town of Abbottabad, did not attract the attention of Pakistani security officials, in part, because it had been raided in 2003 in an attempt to capture Abu Faraj Al-Libi, an alleged senior al Qaeda operative who was later captured in 2005. Bin Laden did not think lightning would strike twice, the official said.
"It was a double bluff," he said, adding, "That kind of a house is not something extraordinary. Anyone with any amount of money would buy a house like that because they are concerned about security."
Pakistan officials have been on the defensive since the news was announced late Sunday that al Qaeda's leader and America's most wanted man was killed in a top-secret raid conducted by U.S. Navy SEALs.
Though U.S. intelligence agencies had been on bin Laden's trail for years, they did not inform their Pakistani counterparts until after the mission. The Pakistani intelligence was informed at around 2 a.m. Monday, just after the raid was conducted.
CIA head Leon Panetta told Time magazine that U.S. officials feared that "any effort to work with the Pakistanis could jeopardize the mission. They might alert the targets." He also reportedly told members of Congress on Tuesday that the Pakistanis were either "involved or incompetent" and "neither place is a good place to be."
When he received news of bin Laden's death, the Pakistani official told ABC News he "was relieved but not happy with the way it was done."
He said the secrecy of the mission and Panetta's comments in recent days have hit Pakistani officials pretty hard, and will inevitably be "major blow" to U.S.-Pakistan cooperation for the near future.
"Now there's a total deficit of trust. That is a big blow," he said, citing ten years of cooperation that led to the capture of hundreds of high-value al Qaeda and Taliban targets. "This relationship has to be based on trust, respect and equality."
The United States is not sharing any of the intelligence it has received thus far from documents and computers taken from bin Laden's house, the official said, but he added that it could lead to other major captures.
Though news of bin Laden's death was met with jubilation in the United States, many experts say the terror threat is far from over, a sentiment echoed by Pakistanis.
"This will be a big boost to Obama's poll numbers but the war on terror will continue unabated," the official told ABC News. "Osama bin Laden was just a symbol."
Pakistan's intelligence community believes that bin Laden was not operationally involved in al Qaeda for some time, though they warn that his death is likely to spur revenge attacks.
"There will be retribution," he said.
The United States' next key target is Ayman al-Zawahiri, al Qaeda's new leader. Pakistani officials say he is not in Pakistan.
A spokesman for the Pakistani Taliban told ABC News in a telephone interview that it will carry out attacks on American targets in retaliation for bin Laden's killing.
"We will take revenge on America and anybody who was involved in the attacks," he said. "We will take revenge on the infidels."
Though doubts about bin Laden's death persist among some Muslims, particularly Pakistanis, the Taliban have seemed to accept American assurances al Qaeda's leader is gone, and are not demanding photographic proof.
Speaking about him in the past tense, the spokesman for the Pakistani Taliban said, "Bin Laden has left behind a great legacy."
ABC News' Huma Khan contributed to this report.