Oct. 19 (Bloomberg) -- Pakistan’s army said it was targeting the hometown of the architect of the Taliban’s suicide bombing campaign as it presses an offensive against up to 10,000 militants.

Soldiers have advanced up to 15 kilometers (9 miles) into the mountainous area, where militant leaders remain, army spokesman Major General Athar Abbas said. The town of Kotkai, home to Taliban commander Qari Hussain, who Pakistani officials say heads the militants’ suicide-bomb operations, has been “enveloped,” Abbas said in Islamabad. Guerrillas “have taken positions on mountains,” said Abbas. “It is somewhere between a conventional and an unconventional operation.”

Three army columns have entered South Waziristan, seeking to destroy the Taliban faction led by Baitullah Mehsud until his killing in a U.S. missile strike in August. Pakistan blames the group for 80 percent of terrorist attacks in the country, including seven attacks last week that killed about 150 troops, police and civilians. The army had built a force of 28,000 soldiers around South Waziristan before the operation began.

As the offensive continues, authorities are bracing for as many as 250,000 refugees. Fighting is taking place over 2,200 square kilometers (850 square miles) near the towns of Ladah and Makin, the stronghold of slain guerrilla leader Mehsud, said Tariq Hayat Khan, secretary of the Federally Administered Tribal Area, which includes Waziristan and borders Afghanistan.

Pakistan’s stock index, the world’s worst performer today, fell the most in almost eight months on concern the military campaign will trigger retaliatory attacks. The benchmark Karachi Stock Exchange 100 Index sank 426.83, or 4.3 percent, to 9,411.29 at the close.

Ground, Air Attacks

Fighting has killed 78 guerrillas and nine soldiers since the operation began 60 hours ago, Abbas said, adding troops had faced “heavy fighting” in some places. “The nation has decided to throw these terrorists out of the country,” Information Minister Qamar Zaman Kaira said. “The recent wave of terrorism” came from Waziristan.

Accounts of the fighting couldn’t be confirmed as Pakistan bars foreigners from the tribal areas and local journalists have been forced out by the government and Taliban.

Ground and air attacks by the military began on Oct. 16. About 1,000 of the militants in the region may be foreigners, Abbas said today.

The Waziristan offensive is Pakistan’s biggest yet against the Taliban and its allies, who have mounted increasing attacks on government targets since mid-2007 and this month attacked Pakistan’s army headquarters. The U.S. has encouraged offensives against Pakistan-based Taliban, saying Waziristan and other border districts are sanctuaries for al-Qaeda and other jihadists who also attack American-led troops in Afghanistan.

U.S. Visitors

U.S. Senate Foreign Relations Committee Chairman John Kerry, the co-sponsor of a new U.S. civilian aid package, and General David Petraeus, the head of U.S. Central Command, met senior government and military officials on visits to Pakistan today.

Pakistani Prime Minister Yousuf Raza Gilani urged the U.S. and other donors to provide aid for the expected influx of refugees, and the reconstruction of the districts of Swat and Malakand, damaged during an army offensive against militants this year. In a statement, Gilani said the army’s operations in Swat and now South Waziristan proved “Pakistan’s firm resolve to root out the menace of terrorism.”

Taliban spokesman Azam Tariq said the guerrillas had inflicted “heavy casualties” on the army, the Associated Press reported yesterday. “We will defend our land till our last man and our last drop of our blood,” the agency quoted him as saying. “This is a war bound to end in the defeat of the Pakistan army.”

Eight Weeks

The army has said it expects to complete the offensive in six to eight weeks, though today Abbas said he could not say how long it would last.

“This fight could be longer and harder than any the army has taken on so far,” said Ashraf Ali, director of the FATA Research Center, an Islamabad think-tank that studies the tribal areas, including Waziristan.

“The Waziristan terrain is much tougher for the army and better for guerrilla-style fighters,” Ali said. He added that the Taliban targeted in the campaign “are more experienced and trained than the ones in Swat,” the northern valley the army recaptured in a 10-week battle that ended in July.

Even a determined offensive may not crush the Mehsud faction or its allies.

The Taliban will “split into small groups and harass the strangers in a terrain which the Mehsuds know well,” said Bahukutumbi Raman at the Chennai, India-based Institute for Topical Studies. Pakistan is likely to face a new round of terrorist attacks in cities far from the fighting, he said.

Popular Support

Working in the army’s favor is the fact that Pakistanis seem more supportive of a government strike on the Taliban than in previous years, said Ali.

“The Taliban present themselves as fighting jihad against usurpers occupying Muslim lands, but this year they have been bombing mosques, marketplaces, the army and police, and this has reduced the public sympathy for them,” he said.

The army operation, titled Rah-i-Najat, the “The Way of Salvation,” includes the largest force the army has assembled in Waziristan and is better prepared than three smaller offensives that failed there since 2004, said Mahmood Shah, an analyst and former army security chief for the tribal region.

South Waziristan is a mountainous land of 6,620 square kilometers with a population of about 500,000. Former military ruler Pervez Musharraf deployed troops in the tribal areas in 2003 after the U.S. said Taliban militants based in the region were launching attacks at coalition forces based in Afghanistan.

The region is dominated by ethnic Pashtuns, who have had autonomy under an agreement with the government signed in 1948, a year after the country’s independence from Britain.

To contact the reporter on this story: Khalid Qayum in Islamabad at kqayum@bloomberg.netJames Rupert in New Delhi at jrupert3@bloomberg.net.

Last Updated: October 19, 2009 08:47 EDT