Pakistan fires defense minister, escalating crisis ISLAMABAD (AP) - Pakistan's government fired the defense secretary Wednesday and the army warned of "grievous consequences" for the country, escalating a political and legal crisis that some believe could end in the dismissal of government. Retired Lt. Gen. Naeem Khalid Lodhi, an army loyalist seen as a bridge between the generals and the civilian government, was dismissed for "gross misconduct and illegal action" and replaced with a bureaucrat close to Prime Minister Yousuf Reza Gilani, the government said in a statement. The developments were sign of near-open conflict between the army and the in a nation that has seen repeated military coups in its six-decade history. Relations between President Asif Ali Zardari and the generals have never been good, but have soured dramatically in recent months over a memo sent to Washington asking for its help in reining in the power of the military. Political instability has dogged the government since it took office in 2008 after a 10-year army dictatorship, and there have been frequent, wrong predictions of its demise since then. While unpopular, the government has a solid majority in parliament and its unclear whether the army or the Supreme Court have the stomach to unseat it midterm. The current standoff has hampered the nuclear-armed country's ability to battle al-Qaida and Taliban militants and coincided with the near collapse of ties between Pakistan and the United States, a relationship seen as key to negotiating an end to the war in Afghanistan. The memo, allegedly masterminded by Pakistan's then envoy to Washington, outraged the army, which portrayed it as a threat to national security. Acting under its pressure, the Supreme Court ordered a probe to establish whether it had been sanctioned by Zardari, something that could lead to impeachment hearings. As part of the investigation, army chief Gen. Ashfaq Pervez Kayani and the head of the main spy agency, Lt Gen. Ahmed Shuja Pasha, submitted statements to the court in which they suggested the memo was part of a conspiracy against the army. Prime Minister Yousuf Reza Gilani said in an interview to a Chinese newspaper that Kayani and Pasha had violated the constitution by doing this. The interview was also published by Pakistan's state-run news agency. An army statement denied the mens' actions were illegal, and said Gilani's allegations had "very serious ramifications with potentially grievous consequences for the country." It did not elaborate. An aide to Gilani said Lodhi was fired because of his role in submitting Kayani and Pasha's statements to the court. The Supreme Court is at the center of another affair that could also see the dismissal of the government. It has ordered the attorney general to open corruption proceedings against Zardari over a once shelved case, something the government is refusing to do. On Tuesday, judges warned they could dismiss Gilani unless he followed their order to pursue the case. It ordered the government to attend proceedings next week to explain its inaction. "I think the lines have been drawn, now it depends on who fires the next shot," said Rasul Bakhsh Rais, professor of political science at Lahore University of Management Sciences. It is a three dimensional war: the judiciary, the political executive and the armed forces. Observers say political pressure is growing to topple the government before Senate elections scheduled for March, which are expected to give Zardari's party a majority in the upper house that would give him significant political power for the next six years. The country also is to hold general elections next year, although some are pushing for the vote to be held sooner. Most independent analysts say the army has little appetite for a direct coup but is happy to allow the Supreme Court, believed to be hostile to Zardari, to end the current setup via "constitutional" means. We can't rule out those impulses. They are rooted in history, but right now the army have decided not to. Rather they will stay by the sidelines and watch the court," said Rais.