ISLAMABAD — Pakistan's powerful spy chief, who's important to the domestic campaign against Islamic extremists and his country's co-operation with the U.S.-led coalition in neighboring Afghanistan, will remain in office for another year, the government announced Wednesday.

Lt. Gen. Ahmad Shuja Pasha was due to retire later this month as the head of the Inter-Services Intelligence agency, and his additional year could help cement Islamabad's increasingly tough position against militants and improving relationship with the U.S.

The decision signals that a similar extension probably will be granted to the army chief, Gen. Ashfaq Kayani, who's scheduled to retire before the end of this year.

"Given the narrow window of opportunity that U.S. President Barack Obama's administration has to turn things around in the Afghanistan-Pakistan region — the epicenter of global jihadist activity . . . Pasha's extension is an extremely significant development," Stratfor, a private U.S. intelligence-analysis firm, said in a report.

American officials have lobbied for the extensions for Kayani and Pasha, whose cooperation with the U.S. military and the CIA they praise, and who senior American officials think now recognize the danger that Afghan and Pakistani Taliban groups pose to nuclear-armed Pakistan.

The near-simultaneous retirements scheduled for Pasha and Kayani, as well as the planned retirement of Gen. Tariq Majeed, the chairman of the Joint Chiefs of Staff Committee, had raised fears over the continuity of Pakistani policy. More than eight years after the U.S.-led intervention in Afghanistan, the West and Pakistan finally appear to be cooperating more closely, although both sides maintain their suspicions of each other.

However, Kayani's relationship with the U.S. and his extension in office by a civilian government, which would be unprecedented, could stoke resentment from other senior officers who remain suspicious of American motives and whose promotions would be put on hold.

Pasha, whom Kayani appointed to the ISI job in October 2008, is said to have planned the Pakistani military's two big offensives against homegrown Taliban extremists last year, in the Swat valley in the North West Frontier Province and in South Waziristan on the Afghan border.

The offensives were the military's first concerted action against the Pakistani Taliban after years of halfhearted operations and peace deals with the extremists.

The ISI supported, trained and even created Islamic extremist groups, first to battle the Soviet occupation of Afghanistan and later to fight in India and the disputed northern region of Kashmir.

Stratfor said the ISI "is in the process of a major shift; it is transitioning from being the cultivator of jihadists to being an entity that fights them."

The change started before Pasha, with some pro-jihadist officers fitfully purged since 2001, but it gathered momentum under him.

Pasha, 57, has vowed privately to smash jihadists of all stripes on Pakistani soil, not just those who threaten his own country, according to those who know him. His claim took on weight in recent weeks when Pakistan said it had arrested a series of senior Afghan Taliban commanders long thought to be its proxies in Afghanistan.

Senior U.S. officials, though pleased with the arrests, remain unsure of the motives behind them, partly because, they say, Pasha's ISI continues to fuel rampant anti-Americanism in the Pakistani news media. They think it's too early to ascribe the captures to a decision by Pakistan to abandon its decades-old strategy of using armed proxies to achieve its goal of placing a pro-Islamabad government in Kabul and minimizing the influence there of its neighboring archfoe, India.

Senior Obama administration and U.S. military officials think the arrests are more likely an effort by Pakistan to position itself for what it's convinced is an inevitable American troop withdrawal from Afghanistan by ensuring that Islamabad has a powerful say in any peace talks and no Afghan insurgent leaders make separate deals with the U.S. and Afghan governments.

(Shah is a McClatchy special correspondent. Jonathan S. Landay and John Walcott contributed to this article from Washington.)

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