In a Washington Post op-ed, Zalmay Khalilzad calls on the US to deal with the Taliban in Afghanistan. “It is time for the United States to reengage.…The Taliban does not practice the anti-US style of fundamentalism practiced by Iran—it is closer to the Saudi model.” He calls on the US to help the Taliban “put Afghanistan on a path toward peace,” noting that continuing violence “has been a source of regional instability and an obstacle to building pipelines to bring Central Asian oil and gas to Pakistan and the world markets.”
[Washington Post, 10/7/1996] However, by 2000, Khalilzad will sour on the Taliban. In a speech in March 2000, he will state, “Afghanistan was and is a possible corridor for the export of oil and gas from the Central Asian states down to Pakistan and to the world. A California company called Unocal was interested in exploring that option, but because of the war in Afghanistan, because of the instability that’s there, those options, or that option at least, has not materialized.”
[Los Angeles World Affairs Council, 3/9/2000]
October 22, 1996: US Intelligence Indicates ISI Is Supplying Taliban with Weapons and Supplies
A classified US intelligence report concludes the ISI “is supplying the Taliban forces with munitions, fuel, and food.” The report notes that while the food shipments are taking place openly, “the munitions convoys depart Pakistan late in the evening hours and are concealed to reveal their true contents.” [US Intelligence, 10/22/1996 
]
Late 1996: ISI Returns Afghanistan Training Camps to Bin Laden and Subsidizes Their Costs
When bin Laden moved from Sudan to Afghanistan (see May 18, 1996), he was forced to leave most of his personal fortune behind. Additionally, most of his training camps were in Sudan and those camps had to be left behind as well. But after the Taliban conquers most of Afghanistan and forms an alliance with bin Laden (see After May 18, 1996-September 1996), the Pakistani ISI persuades the Taliban to return to bin Laden the Afghanistan training camps that he controlled in the early 1990s before his move to Sudan. The ISI subsidizes the cost of the camps, allowing bin Laden to profit from the fees paid by those attending them. The ISI also uses the camps to train militants who want to fight against Indian forces in Kashmir. [Wright, 2006, pp. 250] In 2001, a Defense Intelligence Agency agent will write about the al-Badr II camp at Zhawar Kili. “Positioned on the border between Afghanistan and Pakistan, it was built by Pakistan contractors funded by the Pakistan Inter-Services Intelligence Directorate (ISI), and protected under the patronage of a local and influential Jadran tribal leader, Jalalludin [Haqani],” the agent writes. “However, the real host in that facility was the Pakistani ISI. If this was later to be bin Laden’s base, then serious questions are raised by the early relationship between bin Laden and Pakistan’s ISI.” [Defense Intelligence Agency, 10/2/2001 ]
Late 1996: Bin Laden Becomes Active in Opium Trade
Bin Laden establishes and maintains a major role in opium drug trade, soon after moving the base of his operations to Afghanistan. Opium money is vital to keeping the Taliban in power and funding bin Laden’s al-Qaeda network. One report estimates that bin Laden takes up to 10 percent of Afghanistan’s drug trade by early 1999. This would give him a yearly income of up to $1 billion out of $6.5 to $10 billion in annual drug profits from within Afghanistan. [Financial Times, 11/28/2001] The US monitors bin Laden’s satellite phone starting in 1996 (see November 1996-Late August 1998). According to one newspaper, “Bin Laden was heard advising Taliban leaders to promote heroin exports to the West.” [Guardian, 9/27/2001]
1997: CIA Re-opens Afghanistan Operations
Special CIA paramilitary teams enter Afghanistan again in 1997. [Washington Post, 11/18/2001] Gary Schroen, head of the CIA’s Pakistan office during the late 1990’s, will later comment, “We had connections to the Northern Alliance, Ahmed Shah Massoud’s group of Tajik fighters up in the north. The CIA was sending teams into northern Afghanistan from ‘97 up until about 2000 to meet with Massoud’s people, to try to get them involved.” [PBS Frontline, 1/20/2006] (The CIA’s anti-Soviet covert operations officially ended in January 1992. [Coll, 2004, pp. 233] ) Around 1999 there will be a push to recruit more agents capable of operating or traveling in Afghanistan. Many locals will be recruited, but apparently none is close to bin Laden (see 1999). This problem is not fixed in succeeding years. [Washington Post, 2/22/2004; 9/11 Commission, 3/24/2004]
Febuary 25, 1997: Monitored Fax Links Ali Mohamed and Others in US and Germany to Al-Qaeda Leader
In February 1997, Wadih El-Hage, Osama bin Laden’s former personal secretary now living in Kenya and working on an al-Qaeda bomb plot, goes to Afghanistan and visits bin Laden and al-Qaeda leader Mohammed Atef (see February 7-21, 1997). He returns to Kenya with a seven-page report from Atef, al-Qaeda’s military commander, that details al-Qaeda’s new ties to the Taliban. Atef writes: “We wish to put our Muslim friends in the picture of the events, especially that the media portrayed an untrue image about the Taliban movement. Our duty towards the movement is to stand behind it, support it materially and morally.” On February 25, 1997, El-Hage faxes the report to some associates with the suggestion that it be shared with the “brothers in work.” US intelligence is monitoring El-Hage’s phone and learns the contents of the fax and whom it is sent to. The fax is sent to: 
Ali Mohamed, the US-al-Qaeda double agent living in California. Mohamed has already been under surveillance since 1993 for his al-Qaeda ties (see Autumn 1993). He will not be arrested until one month after the 1998 African embassy bombings (see September 10, 1998). Ihab Ali Nawawi, an apparent al-Qaeda operative living in Orlando, Florida. It is not known if Nawawi is monitored after this, but communications between him, Mohamed, and El-Hage are discovered in January 1998 (see January 1998). He will not be arrested until May 1999 (see May 18, 1999). Farid Adlouni. He is a civil engineer living in Lake Oswego, Oregon. In 1996 and 1997, El-Hage calls Adlouni in Oregon 72 times, sometimes just before or after meeting with bin Laden. Later in 1997, Adlouni’s home phone and fax numbers will be found in two personal phone directories and one notebook kept by El-Hage (see Shortly After August 21, 1997). Records show that El-Hage has extensive dealings with Adlouni, mostly by selling gems El-Hage bought in Africa for a better price in the US. The FBI interviews Adlouni twice in late 1997, but he is not arrested. As of 2002, it will be reported that he continues to live in Oregon and remains a “person of interest” and subject of investigation by the FBI. Other copies of the fax are sent to associates in Germany, but they have not been named. Apparently these contacts do not result in any arrests, as there are no known arrests of al-Qaeda figures in Germany in 1997. [Oregonian, 9/13/2002]
May 25-28, 1997: Saudi Arabia, Pakistan, and UAE Officially Recognize Taliban Government
Saudi Arabia, Pakistan, and the United Arab Emirates (UAE) officially recognize the Taliban government. Pakistan is the first to give recognition, doing so on the same day the Taliban temporarily conquers the town of Mazar-i-Sharif in northern Afghanistan. [Washington Post, 5/28/1997; Guardian, 5/29/1997] On 9/11, these three will still be the only countries that recognize the Taliban as the legitimate rulers of Afghanistan. [US Congress, 7/24/2003]
May 26, 1997: Taliban Government Is Officially Recognized by Saudis
The Saudi government becomes the first country to extend formal recognition of the Taliban government of Afghanistan. Pakistan and the United Arab Emirates will follow suit. On 9/11, these three countries are the only countries that officially recognize the Taliban. [US Congress, 7/24/2003]
August 13, 1997: US Aware Taliban Are Paying Pakistani Government with Drugs
A classified US cable on this date reveals US intelligence is aware that the Taliban are paying the Pakistani government for wheat and fuel with drugs. The cable suggests that Pakistan is planning to demand hard currency instead of drugs in order to restrain drug trafficking and increase revenue, but it is unclear if this change ever takes place. [US Embassy (Islamabad), 8/13/1997 ]
August 27, 1997: US Ambassador Criticizes Pakistan over Its Aid to Taliban
According to later released US documents, US Ambassador to Pakistan Tom Simons
criticizes a high-ranking Pakistani official about Pakistan’s aid to the Taliban. This official protests that total Pakistani aid to the Taliban is only about half a million dollars. However, Simons replies that even if he believed that figure, it does not include wheat, petroleum, oil, lubricants, and “trucks and buses full of adolescent [fighters] crossing the frontier shouting ‘allahu akbar’ and going into the line with a day or two of weapons training. That [is] Pakistan’s real aid.” [US Embassy (Islamabad), 8/27/1997 ]
