Pakistani's ISI (sort of a combined CIA and military intelligence) and regional military forces in Kashmir have enabled al Qaeda members to reorganize in Pakistani Kashmir. The al Qaeda operate openly. American officials cannot operate in Pakistani Kashmir as they can in other parts of Pakistan. President Musharraf apparently is not willing to risk violence by imposing more control over ISI and Islamic radicals in Kashmir. Musharraf also has to worry about the loyalty of senior generals, some of whom are determined to see Pakistan control all of Kashmir no matter what. 

The Pakistani government has publicly called for the public to provide information on Islamic terrorists. While there have long been active terrorists inside Pakistan (mainly feuding Sunni and Shia militants), they generally restricted their attacks to specific areas or groups. The new terrorism, apparently organized by al Qaeda, is targeting foreigners, but it killing Pakistanis as well. Thus the government feels they can get some public cooperation in dealing with the al Qaeda inspired attacks.