When is a terrorist not a terrorist? America's Haqqani conundrum.

At first glance, it might seem like a no-brainer for the United States to add the Pakistan-based Haqqani network to its list of foreign terrorist organizations.

A series of US executive orders since 2008 targeting the group’s top leaders has not dissuaded the Haqqanis from attacking US interests in the region. Last week Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, cited evidence that the Haqqani network – which he said has close ties to Pakistan’s intelligence agency – was behind the attack on the US embassy in Kabul earlier this month.

Yet even though it appears the State Department, under intense pressure from Congress, is moving closer to adding the group to the US terrorist list, there are also several key reasons the US is weighing the designation carefully.

Among them:

• Designating the Haqqani network would deal another blow to US-Pakistan cooperation, and could – given accusations such as Mullen’s – encourage pressure to add Pakistan to the US list of state sponsors of terror.
• Making the designation would suggest to some Afghans and Pakistanis that the US is throwing in the towel on reconciliation efforts as a critical component of the strategy to wind down the Afghanistan war.
• Listing the Haqqanis might not offer the benefits, in terms of dealing any financial blow to the group, to outweigh the costs it could entail.

“Certainly the biggest concern is that designating the Haqqani network would put a lot of pressure on Washington to go a step further and designate Pakistan as a state sponsor of terror,” says Michael Kugelman, a South Asia expert at the Woodrow Wilson Center International Center for Scholars in Washington. “That would effectively spell the end of US-Pakistan relations as we have known them.”

The list of potential ramifications suggests why the State Department will say only that it continues to evaluate the pros and cons of designating the Haqqani group – an evaluation that has been in the works for years.

“We are continuing to review whether to designate the entire [Haqqani] organization,” State Department spokeswoman Victoria Nuland told reporters Tuesday.

But she suggested that concerns for US-Pakistan relations were part of the equation. The US has been “absolutely clear” in extensive high-level conversations with the Pakistanis “that the Haqqani network is job one, that we want to do it together, and that’s the conversation that we’re having now,” she said.

US-Pakistan relations have been on a bumpy but overall downward trajectory for years, with ties hitting another chute after the US raid in May that killed Osama bin Laden. But US interests in maintaining relations with Pakistan continue to outweigh the reasons for cutting them off, many regional analysts say.

“Certainly Pakistan has been a duplicitous ally, there’s no question about that,” says Malou Innocent, a South Asia expert at the Cato Institute in Washington. “But while that may be a reason to be less dependent on Pakistan, the reality of the moment is that we are tremendously dependent on them,” she adds, “so that reality influences the actions we take.”

Pakistan continues to be important to US antiterror efforts because it has been the center of Al Qaeda command and control. Pakistan also secretly allows US drone attacks against militants on Pakistani soil – a tactic that has been increasingly successful. Moreover, the US wants to maintain the stability of the secular government, given that Pakistan has nuclear weapons and is infested with Islamic radicals.

Mr. Kugelman of the Wilson Center says he expects the State Department will end up designating the Haqqani network – but he says the US should resist the pressure to “go the next step and designate Pakistan” as a state sponsor of terror.

“The US does not have compelling national interests for maintaining relations with the four countries on that list,” he says, referring to Cuba, Iran, Sudan, and Syria. “But the US has tremendous interests in maintaining relations with Pakistan.”

Another reason the US has gone slow on designating the Haqqanis is the impact it could have on reaching a political settlement in Afghanistan.

“The Haqqani network is just one of many influential factions the administration must deal with if they are to reach any kind of a political settlement in Afghanistan,” Ms. Innocent says. Negotiations could be doomed if the US puts one of the “influential groups” off limits, she says.

“And once they are designated, it’s more difficult to argue why anyone should negotiate with a group you have said is a terrorist organization,” she says.

But others say the US should forget the idea that the Pakistani group could be drawn into a political settlement. “I would argue the Haqqani Network never had any interest in joining any talks on reconciliation in Afghanistan,” Kugelman says.

Several influential senators have issued statements in recent days that in effect call on the State Department to move beyond a longstanding “review” of the Haqqani network and place it on the terrorist list. Sen. Diane Feinstein (D) of California, who chairs the Senate Intelligence Committee, made public a letter she sent to Secretary of State Hillary Rodham Clinton following Mullen’s Senate testimony.

“I repeat my request that the Haqqani network should be listed” as a foreign terrorist organization,” Senator Feinstein wrote, “and ask that you respond in writing.” Feinstein made the same request in a letter to Secretary Clinton in May 2010.

In a Senate hearing last week, Sen. Carl Levin (D) of Michigan said he had “repeatedly written to Secretary Clinton” demanding the designation, a step he called “long overdue.”

But Cato’s Innocent notes that even US military officials have said the Afghanistan war cannot be won military, and will require a political solution. “If that’s the case, then we have to look at engaging all the influential factions,” she says, adding, “even if they are odious.”