Wall Street Journal

By DION NISSENBAUM in Kabul, TOM WRIGHT in New Delhi and OWAIS TOHID in Karachi

NATO and Afghan forces on a nighttime operation Saturday came under fire from across the border in Pakistan before they called in an air strike on two Pakistani military border posts that left 25 soldiers dead and the U.S.'s relations with Pakistan in tatters, according to Afghan and Western officials' version of events.

Pakistan's army reacted angrily, calling the "unprovoked" raid on the border posts an "irresponsible act." The military denied firing on NATO forces and questioned why the coalition undertook a sustained two-hour attack on well-known border positions, involving helicopters and fighter jets, which also injured 25 other soldiers.

"No first fire came from Pakistan troops," said a senior Pakistani military official Sunday. "But they did respond in self-defense after NATO gunship helicopters and jet fighters carried out unprovoked firing."

In retaliation, Pakistan indefinitely shut down North Atlantic Treaty Organization supply lines through Pakistan and said it was reevaluating its military, intelligence and diplomatic links with the U.S. Authorities gave the U.S. two weeks to pull out of a Pakistani airbase that Washington has used in the past to launch drone strikes on Taliban militants, attacks which have become increasingly unpopular among Pakistani people.

Pakistan Foreign Minister Hina Rabbani Khar, in a telephone conversation with U.S. Secretary of State Hillary Clinton on Sunday, communicated her "deep sense of rage" for the attack, which she said had set back efforts to improve relations, Pakistan's foreign ministry said in a statement.

On Sunday, NATO Secretary General Anders Fogh Rasmussen promised a full inquiry in to the "tragic unintended incident." He termed the deaths of Pakistani personnel "unacceptable and deplorable."

NATO supply trucks sitting idle after Pakistani officials closed the border crossing into Afghanistan to protest the NATO attack.

The Obama administration pledged a full investigation into the attack.

Mrs. Clinton, a U.S. government statement said Saturday, committed to reviewing the "circumstances of the incident" and stressed "the importance of the U.S.-Pakistani partnership."

The attack is a major setback for U.S. efforts to bring Pakistan onside as President Barack Obama's administration works to find an exit strategy from the 10-year war in Afghanistan.

Mrs. Clinton, in an October visit to Islamabad, attempted to forge an agreement with Pakistan to squeeze militants operating in Pakistan's border areas and to get the country's help in bringing Taliban leaders to peace talks.

A Western official with knowledge of the discussions said both sides had begun to rebuild confidence ahead of a key international meeting in Bonn, Germany, next month to discuss the situation in Afghanistan.

The attack Saturday set the clock back on a relationship that had only just begun to recover from a number of incidents, including the secret U.S. raid that killed Osama bin Laden on Pakistani soil in May and the killing of two Pakistani men in Lahore by a Central Intelligence Agency contractor in January.

"It will be difficult to make much progress in the days to come," the Western official said.

The incident took place hours after Gen. John R. Allen, the coalition commander in Afghanistan, met Friday with army officers in Pakistan to reduce rising tension on the poorly demarcated border. Gen. Allen said a one-star coalition general will lead an investigation into Saturday's deaths.

Afghan and U.S. officials say their troops are increasingly facing fire from Pakistan's side of the border. Pakistan is angry over the increased incidence of cross-border raids by Afghan and NATO forces.

As U.S. military, Pakistani forces and Afghan officials sought to piece together the deadly and destabilizing incident, three Afghan and one Western official said the attack took place in response to fire from the remote Pakistani posts in the Mohmand tribal region, a lawless border area that abuts Afghanistan's eastern Kunar province.

Two Afghan officials working in the border area where the attack took place said Sunday that the joint force was targeting Taliban forces in the area when it received fire from a Pakistan military outpost. That prompted the coalition force to call for an air attack on the Pakistani posts, said an Afghan Border Police official in the area. Pakistani officials were informed of the operation before it took place, he said.

"There was firing coming from the position against Afghan army soldiers who requested support and this is what happened," said a third Afghan official in Kabul, where Gen. Allen met with top government leaders for a special security meeting to discuss the incident. The Afghan official in Kabul said the government believes that the fire came from the Pakistan base—and not from insurgents operating nearby.

That view was bolstered by one Western official who discussed the attack with military officials in Kabul on Sunday.

"They were fired on from a Pakistani army base," the Western official in Kabul said. "It was a defensive action."

A U.S. official in Kabul said insurgents may have been firing into Afghanistan near the Pakistani border outpost Saturday morning, which prompted coalition forces to strike back. He pointed to an incident in September 2010, when a NATO helicopter fired on a Pakistan outpost, killing two soldiers.

"It was a situation where insurgent forces butted right up against a Pakistani border post and used that as a firing position. When we fired back, we hit Pakistani security forces. This is a possibility we're circulating here for Saturday's incident," the official said.

Military officials in Kabul said insurgents in Pakistan have also used empty Pakistan border bases to stage attacks, which may have been the working assumption of the coalition forces who called in the air strike.

Pakistan's military disputes this version of events. Military officials say the posts were attacked without warning at 2 a.m, while most of the around 50 soldiers were sleeping, and that NATO helicopters and jets even attacked Pakistani military forces sent in as back-up during the two-hour assault. Pakistan says it has increased the number of soldiers at border posts like these as part of a campaign in Mohmand this year to wipe out the Taliban in the area.

Pakistan's military set up check posts in the mountainous terrain of the Mohmand tribal agency after security forces launched a crackdown there against the Pakistan Taliban earlier this year. Officials claimed to have destroyed the Pakistan Taliban's training centers and bases, declaring the Mohmand region cleared of insurgents. Local tribal fighters supported the security forces.

The posts hit by NATO on Saturday are built on the mountain called Salala in Mohmand. The area borders parts of Afghanistan that are believed to be Afghan Taliban strongholds, and Pakistan Taliban routed in the offensive are believed to have fled there. Tribal elders of the local lashkars, or peace committees, in Mohmand are infuriated over the NATO attack and issued warnings of waging a fight with coalition forces Sunday.

"We have sacrificed our lives in the fight against Taliban who killed hundreds of our tribesmen," said Malik Mohammad Ali, a tribal elder from Mohmand.

The incident comes as the U.S. has begun to more publicly voice concerns that Pakistan's military, despite fighting militants in places like Mohmand, is harboring some factions of the Taliban as a way of influencing events in Afghanistan after most international troops pull out in 2014. At the least, U.S. officials say, Pakistan is failing to stop some militants firing on U.S. troops from close to Pakistani military posts.

But the U.S. also has attempted to get Pakistan army chief, Gen. Ashfaq Parvez Kayani, to play a larger role in bringing the Taliban into nascent peace talks that have so far failed to bear fruit.

Gen. Kayani's ability to accede to U.S. demands is greatly limited by events like the one Saturday, which stoke anti-U.S. fervor in Pakistan, said Talat Masood, a retired general and defense analyst.

"Those who have been more moderate, even those people are asking is it worth having a relationship with the U.S.?" Mr. Masood said. "It will be very difficult for Gen. Kayani to defend the alliance."

Mr. Masood said he had taped a television chat show Saturday after the attack on the border posts during which he was the only participant arguing that the U.S. wouldn't have targeted Pakistani soldiers in Mohmand as a deliberate act of aggression.

Few observers, though, expect a complete breakdown in relations.

Pakistan has shut its border, which will temporarily hurt NATO's supply chain to Afghanistan, but the country continues to rely on billions of dollars in military and civilian aid from the U.S. Washington, likewise, needs Pakistan to keep up pressure on Taliban militants in the tribal region, and as a supply route.

"This is a need-based relationship. It will have its temporary hiccup, probably in the form of the suspension of NATO cargo," said Imtiaz Gul, director of the Center for Research and Security Studies, an Islamabad-based think tank.

During the national security meeting Sunday, Afghan leaders also solidified plans to carry out the second phase of plans for coalition forces to cede security control to Afghan forces across the country.

The new plan includes six of the country's 34 provinces, including Kabul, seven major cities, including Jalalabad, and dozens of districts, including Helmand province's Marjah, which was the first target last year of U.S. Marines at the forefront of the American military surge meant to cripple the Taliban-led insurgency.

If the transition is a success, it will put Afghan forces in the lead in protecting more than half of the country's population, officials said.

During the first phase of the transition process carried out earlier this year, Afghan forces assumed control of seven cities and provinces.

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—Maria Abi-Habib and Habib Khan Totakhil in Kabul contributed to this article.