In Pakistan, army adamant on fighting the other Taliban By Frank Jack Daniel KALAM, Pakistan (Reuters) - In the past few years, Pakistan's Swat valley has been occupied by Islamic insurgents, undergone a bruising counter-offensive by the army and then flooded by waters that washed away acres of fruit orchards and steeply terraced fields. In October last year, the valley which lies about 250 km (155 miles) north of the capital Islamabad was again in the global spotlight when Islamic gunmen shot schoolgirl Malala Yousafzai. Now, as villagers try to piece together shattered lives, the military is coming under pressure to talk peace with the Taliban, a ruthless Pakistani offshoot of the Islamic radical movement of the same name in neighboring Afghanistan. Civilian Pakistani leaders elected in May want to open a dialogue with the homegrown militants set on overthrowing the nuclear-armed state. They say the local people are fed up with the violence and that any talks will be legitimized by U.S. efforts to promote peace with the Afghan Taliban. But the powerful military, which has spent years chasing the Pakistan Taliban into ever-more remote hideouts, is in no mood to negotiate with militants who have killed thousands of soldiers and who they say cannot be trusted. Some villagers back that stand. " (The Taliban) doesn't accept the government's writ, they are not faithful to the constitution, how can a political party talk to them?" said Abdul Rehman, an elder in the village of Kalam, a former tourist hotspot high in the Swat valley and ringed by snow-capped peaks of the Hindu Khush. The village is famous for repelling Taliban attacks. "We forced them away, first on our own, then with the help of the army," Rehman told Reuters during a visit organized by a U.N. organization funding flood relief work in his village, which is set among pine forests and walnut orchards. The debate over whether to open peace talks with the Pakistani Taliban has taken centerstage in the country as U.S. troops withdraw from Afghanistan after a 12-year war against the Afghan Taliban. Pakistan's military leaders are at pains to distinguish between the Afghan Taliban, to which Pakistan maintains ties and which they argue can be seen as fighting against occupation, and its local imitators who they see as domestic terrorists. The Pakistani Taliban pledges allegiance to Mullah Mohammad Omar, the reclusive leader of the Afghan Taliban but Omar is careful not to be seen to attack the Pakistani state. The Pakistani Taliban's suddenly sacked its spokesman on Tuesday amid signs of strained ties between the groups. Prime Minister Nawaz Sharif and his prominent rival Imran Khan both offered to talk to the Pakistani militants while campaigning for May's federal and provincial elections. While Sharif won the federal elections, Khan's party emerged victorious in Khyber Pakhtunkhwa, the province that includes Swat Valley and remains a hotbed of Pakistani Taliban activity. The information minister in Khyber Pakhtunkhwa, formerly the Northwest Frontier Province, told Reuters that the provincial government had called a meeting of other political parties and stakeholders to prepare for peace talks. "The United States has opened up a Taliban office in Qatar and is holding negotiations with them, and we are being told to continue to fight and die," Khan said last month during a visit to Peshawar, the province's violence-blighted capital. "For the last nine years we have relied on the army to bring peace, but instead the situation got worse," he said. It's now time for politicians to resolve the issue. Khan's party, the Pakistan Tehreek-e-Insaf (PTI), says the violence in Khyber Pakhtunkhwa is a reaction to U.S. drone strikes and pro-Washington policies by the army, and that talks are the only answer. But there is no easy solution. Most of the militants seek refuge in the neighboring Federally Administered Tribal Areas (FATA) - districts strung along Pakistan's border with Afghanistan and run by central writ - and the provincial government cannot control the process. FATA is used as a base by the Pakistani Taliban, members of the Afghan Taliban and groups linked to al Qaeda. Sharif's federal government can only do so much. Pakistan's military largely has a free hand regarding internal security, and influences foreign policy, especially relations with neighbours. It is the army, its intelligence agencies and the Taliban itself who will decide whether to talk or fight. The Pakistani Taliban has shown interest in talks, but has stepped up attacks after a series of drone strikes on its leaders and also because it doubts the ability of the civilian leadership to convince the military to allow negotiations. "If we felt that the PTI government or the Nawaz Sharif government were in a position to take a serious step towards peace talks and can oppose the intelligence agencies, then we can seriously think about peace talks," the group's then spokesman Ehsanullah Ehsan said in a video released in June. So far, the military has shown no inclination to relax an offensive many officers feel they can win. "We have to take the fight to them," said a regional commander flying a helicopter over Khyber Pakhtunkhwa. Just before the elections, army chief Gen. Ashfaq Kayani made it clear he would not talk to the militants unless they lay down arms and accept Pakistan's laws. "There is no room for doubts when it comes to dealing with rebellion against the state," he said in an April 30 speech. Locals in Swat said there was good reason to mistrust the militants. A previous peace deal gave the Pakistani Taliban the breathing space it needed to take power in the valley and then extend influence into neighboring districts just 100 km from Islamabad in 2009. That summer, worried by the creeping proximity of Taliban territory to Islamabad, the army launched a full air and ground assault and government forces regained control in a month. But the operation displaced 2 million people, and later, many returned to nothing but dead livestock and flattened orchards. Floods that ripped through Swat the next year made things worse, destroying many of the tightly packed terraces where corn and wheat grow along steep mountainsides. Acute malnutrition among children has jumped by more than a third. Saifullah Khan Mahsud, an expert on the situation in FATA, says the army believes it has the Pakistani Taliban on the back foot and is biding time for a fatal blow in border areas like North Waziristan, where the militants and other global groups are holed up. "At the end of the day it is the military stance that is going to prevail," he said. Additional reporting by Jibran Ahmad and Syed Raza Hassan; Editing by John Chalmers and Raju Gopalakrishnan