In Pakistan's Pashtun tribal belt, Taliban reject peace talks By Saud Mehsud WAZIRISTAN, Pakistan (Reuters) - The Pakistani Taliban envoy drew his white trousers up before settling on the floor of a mud-walled house in Pakistan's ethnic Pashtun tribal region near the Afghan border. Bodyguards, their long hair spilling out from traditional flat caps, listened warily for the occasional sound of a drone aircraft overhead. Carefully, Shahidullah Shahid laid out the conditions for peace talks with the Pakistani government: release all Taliban prisoners, withdraw the army from the tribal areas where the Taliban are entrenched, and stop U.S. drone strikes. The Pakistani Taliban, an umbrella group of factions operating independently from their Afghan Taliban allies, are fighting to set up an Islamic state in Pakistan but the government is trying to negotiate a peace settlement to end years of fighting. "Drones really stop us from moving freely in the area," Shahid, the main spokesman for the Pakistani Taliban, told a small group of reporters on a recent visit to Waziristan. But even if our enemies use an atomic bomb, we would not stop our jihad. Despite the government's push for talks, violence has risen sharply since Prime Minister Nawaz Sharif came to power in a May election. Churches, buses and markets have all been hit, reflecting the Taliban's resolve to keep fighting. Islam doesn't need democracy. Islam itself is a complete system," Shahid said, adding that there had been no direct peace contacts between Sharif's representatives and the Taliban. Taliban officials who escorted Reuters on the trip requested that the exact location of the interview not be revealed. Pakistan sponsored the rise of the Taliban in neighboring Afghanistan in the 1990s but now faces its own home-grown insurgency. It is keen to find a lasting solution to the problem which has devastated communities and ruined the economy. "At the start of negotiations, you don't threaten them, you speak from a position of strength but you don't try to irritate them," Sartaj Aziz, Pakistan's foreign policy chief, said last month. Pakistan's semi-autonomous Pashtun lands along the Afghan border, known as the Federally Administered Tribal Areas (FATA), have never been brought under the full control of any government. British forces for years battled Pashtun rebels promoting jihad, or holy war, against the colonialists. In the 1980s, the region became the staging area for a new holy war, against Soviet occupiers over the British-drawn border in Afghanistan. These days, in areas such as Waziristan, support for a peace deal is strong. Homes and shops have been flattened by army operations, militant fighting and drone strikes. Cars with black tinted windows barrel down roads cratered by roadside bombs. Reflecting the army's nervousness, checkpoints open fire on any vehicles approaching after a curfew at dusk. Pakistan's government publicly condemns U.S. drone attacks on its territory but militants say that the fact the strikes continue means that Pakistan tacitly approves them. "I listen to the radio at night, when there is news about peace talks my family is all alert," said 55-year-old Khan Alam, who fled fighting between the army and the militants. I want to go back to my own home, my orchards, my fields, my graveyard. Observers believe the government and the militants are playing for time ahead of the pullout of most overseas forces from Afghanistan by the end of next year. The militants hope victory for the Afghan Taliban would spur their fight against the Pakistani state. Pakistan hopes the end of the war in Afghanistan will convince the Pakistani Taliban to end their fight. In recent weeks, smaller Taliban factions like Jundullah, which has many fighters from outside the Taliban heartland in the Pashtun areas, have become active. Jundullah claimed an attack on a church in the frontier town of Peshawar that killed more than 80 people last month and an attack on a polio vaccination team on Monday. Such bloodshed casts doubt over the proposed talks and even raises questions about the chances of convincing the fractious militants of the need for peace. "After what the Taliban have done, what kind of peace can they have?" said Saifullah Mahsud of the FATA Research Center, a think-tank that works in the tribal areas. There are divisions but they know they have to stick together to survive. Additional reporting by Katharine Houreld in Islamabad and Terry Moseley in New York; Editing by Maria Golovnina and Robert Birsel