MIRANSHAH, Pakistan — It's been called the most dangerous place in the most dangerous region on the planet.

A rugged swath of tribal territory nestled between Pakistan and Afghanistan, Waziristan is ground zero for some of the region's most notorious militant groups and warlords, including the Pakistani Taliban and Haqqani network.

North and South Waziristan are hit by more U.S. drone attacks than anywhere else in the world.

NBC News obtained rare access to South Waziristan and last week became the first foreign team of journalists to report from North Waziristan.

Long-ignored by the rest of the country, Waziristan is one of the least developed and least educated sections of Pakistan. Literacy rates for women in some areas are in the single digits. With little infrastructure, funding, or investment, many make their living by engaging in criminal activity, cross-border smuggling, or signing up to join militant groups.

The Taliban is believed to pay 10,000 - 12,000 Pakistan rupees a month (roughly $100 - $120) to foot soldiers, with bonuses for carrying out ambushes, killing a soldier, or even members of military families.

Confronting the violence, the Pakistan military is diversifying its campaign in the "war on terror," no longer just fighting in the region, but also beginning to rebuild it.

"There are only less than half a percent of people who are fighting as terrorists. What about the more than 99.5 percent of people?" asks Maj. Gen. Asim Saleem Bajwa, who commanded the army division in South Waziristan in 2010 before becoming official military spokesman.

In the wake of a major operation in 2009, the Pakistan Army has largely succeeded in pushing back the militant threat from South Waziristan. The area is now considered secure and tribal communities that fled the fighting are starting to return.

Bajwa realized that if the tribal communities weren't given something to replace their previous way of life, they might again become willing to help or harbor terrorists.

"Looking at it in a larger security context, you can't really separate development from security," said Bajwa. "So we're doing this to serve the larger purpose as well. "

Public floggings
In the village of Chagh Malai, the army constructed a marketplace, complete with dozens of individual shops carrying everything from cloth to medicine to household supplies. Tribal communities here previously maintained individual shops in their homes or in roadside stalls. The marketplace, army commanders said, gives them a sense of community and a central commercial gathering place. They have plans to build 30 complexes like it across the area.

Tribal elder Akhlas Khan excitedly toured the market last week, introducing store owners and showing off inventory.

"Previously, I'd have to travel four or five hours to get these," he said, gesturing to a small shop carrying electrical goods. "Now, I only need to come here!"

In Sararogha, South Waziristan, an 88-shop market complex now stands at the same site the Taliban — once headquartered here — used to use for public floggings and executions.

"These communities, the vast majority of them, have seen the worst kind of atrocities known to the human race," said Maj. Gen. Ahmed Mahmood Hayat, commander of the Pakistan Army's 40th Division in South Waziristan.

"They've been subjected to coercion — mental and physical -- by the terrorists in order to acquiesce them to support," he added. "They've seen their loved ones being butchered in front of their own eyes. So that is the kind of trauma this society has seen. And therefore the greater the challenge to bring back the confidence of these people into the state machinery."

Trading routes and schools
At the heart of the army's plans to rebuild the area is a 370-mile road — funded in large part by USAID money. The road, half of which is complete, will connect the isolated and insular tribal communities to each other, as well as the rest of mainstream Pakistan and to trading routes across the border in Afghanistan.

When finished, the roadway will offer a third link from Pakistan to Afghanistan, and the army hopes, will encourage business development along its path through Waziristan.

In addition to the road project, the army has taken on development projects far outside its traditional roles. 

Along with the markets, two military schools, known here as Cadet Colleges, were built in South Waziristan to offer young men a rigorous education and boarding-school environment, unlike any educational opportunity available in the region before.

Col. Zahid Naseem Akbar, principal of the Cadet College, Spinkai, said he hopes the school will gives boys in the area the same opportunities as those elsewhere in the country.

"They have the same potential as any other citizen of this country has," Akbar said. "And I think we owe it to them that we provide them the opportunity to join the mainstream."

Waj S. Khan / NBC News

A tribesman waits in line at a 'Distribution Camp' set up on the side the newly constructed Tank-Makeen road in South Waziristan. Radios and mattresses are the items of choice popular among locals, who belong to one of the most impoverished communities in Pakistan.

The army is overseeing the rebuilding to schools demolished by the Taliban and building schools for the first time in some areas, including for girls. The military established the Waziristan Institute for Technical Education -- a vocational school to train young men who missed their early education during Taliban rule. 

And the army is restoring water supplies and electrical systems and funding what they call "livelihood projects," training and empowering local small businesses in everything from honey bee farming and fruit orchards, to auto repair and transport services.

"The strategy that the Pakistan army has adopted is a people-centric strategy," Hayat said. "So the more areas you've able to clear, the more infrastructure you're able to build, the more people you are able to bring back and sustain. Provide them economic opportunities. That is the measure of success."   

Ideal habitat for Taliban
Frontline commanders all say the battle for Waziristan will not be won with hearts and minds alone. Security operations continue, gradually increasing what they call their "elbow space" in the region.

Both North and South Waziristan feature snow-capped peaks, deep valleys, hidden caverns, and daunting mountain ranges which provide natural cover. It's the ideal habitat for the Taliban and other groups seeking refuge and covert routes for travel between Afghanistan and Pakistan.

Atop a 6,000-foot high post in South Waziristan, Brig. Hassan Azhar Hayat said despite securing the area, the struggle to hold it against "pockets of resistance" is constant. His troops, he says, still carry out targeted operations on an almost daily basis.

"That's why the military's presence is so important here right now in this area, that we keep increasing our perimeter of security," Hayat said. "This is guerrilla warfare. It cannot happen that you're able to eliminate the complete Taliban in any form. So it is different warfare altogether."

North Waziristan remains the only one of the seven tribal agencies in the Federally Administered Tribal Areas (FATA) in which the Pakistan military has not launched a significant military operation.

Despite public pressure from the U.S. to act, Pakistani commanders there cite the complexity of the region, the politicized nature of the debate, as well as the increasing stakes of the approaching 2014 drawdown of troops across the border as critical to their operation's timeline.

Slideshow: Pakistan: A nation in turmoil

Mohsin Raza / Reuters

Images of daily life, political pursuits, religious rites and deadly violence.

Launch slideshow

Maj. Gen. Ali Abbas, the commanding officer of the 7th Infantry Division of the Pakistan Army, currently stationed in North Waziristan, said his region must be considered separately because of the number of influences at play. However, 40,000 troops are stationed in North Waziristan, which shares a 113-mile border with Afghanistan, 

"North Waziristan is not like any other agency in Pakistan," Abbas said. "It's very different. It's very complex."

Despite the territory won and economic investments made, there is concern within the local community about a backslide to the time of Taliban rule. Khan, the tribal elder, doesn't want the army to leave until the entire area has been won and a civilian administration has taken over control. Army commanders say their commitment is clear.

"The army will stay here as long as the army is desired by the local people to stay here, and mandated by the government of Pakistan to stay here," Hayat said. "We're here for the long haul. This is our backyard. We cannot ignore it."

Communities in South Waziristan have been slow to return to the region after the end of military operations. In some sections, crumbling homes and untended stretches of land dot the landscape. Small clusters of mud-walled homes sit empty. Army commanders hope as word of their development efforts spreads, more of those who fled the fighting will return. They are taking, they say, a very long view.

"If we really want to change this area, the approach is to do it over one generation," Bajwa added. "Look at the next 10 years. If we put a child in the school now, and 10 years on, we bring him out of the school, we put him into a college, I think we have done our job."

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This story was originally published on Mon Mar 4, 2013 5:00 AM EST

Mohamed Al-Sayaghi / Reuters

Army checkpoints in Yemen search for militants, Saturday

SANAA, Yemen — More than 10 suspected al-Qaida operatives were killed by an explosion in a house in south Yemen where they were making bombs and at least three others died in a drone strike, tribal and official sources said on Sunday. 

A bomb ripped through a house in the province of al-Bayda on Saturday night, the state news agency Saba and a local official said. Three other suspected militants were killed in a drone strike in the central province of Maarib, also on Saturday, tribal sources and the Ministry of Defense said.

Yemen's government has been fighting a powerful branch of al-Qaida that took advantage of chaos in the impoverished state two years ago during a popular uprising against former President Ali Abdullah Saleh.

Al-Qaida in the Arabian Peninsula is considered by Western governments to be one of the most active and dangerous wing of the global network founded by Osama bin Laden, and has attempted a number of attacks against U.S. targets.

The house destroyed in al Bayda had been used for making bombs, an official from the area told Reuters on Sunday.

"We heard a massive explosion that terrified people and when we went to the house it was destroyed and everyone there was dead," the official said.

In Maarib, a pilotless plane carried out two strikes against a car, a witness said.

"One of the strikes missed the target and the other hit the car and left the bodies of the three people in it completely charred," the witness told Reuters by telephone from the area.

He said unidentified people evacuated the bodies while tribesmen blocked the main road linking the capital of Maarib province with Sanaa on Saturday after the strikes.

The Yemeni Defence Ministry said in an SMS text message that a number of militants were killed in two air strikes but gave no further details.

Earlier this month, dozens of armed tribesmen took to the streets in southern Yemen to protest drones they said killed innocent civilians and fed anger against the United States.

President Abd-Rabbu Mansour Hadi spoke openly in favor of the strikes during a trip to the United States in September.

Praised by the U.S. ambassador in Sanaa as being more effective against al-Qaida than his predecessor, Hadi was quoted as saying in September that he personally approved every attack. Hadi has not commented on the most recent strikes.

AQAP offshoot, Ansar al-Sharia seized a number of towns in the south in 2011 but Yemeni government forces retook the areas in a U.S.-backed offensive in June.

Twenty-three hostages and 32 militants were killed in the attack on a natural gas plant deep in the Sahara, the Algerian interior ministry said on Saturday, according to news services.

The official also said 107 foreign hostages and 685 Algerian hostages had been released, several news outlets reported.

Earlier, British Defense Secretary Philip Hammond said, speaking on information received by the British government, that the hostage crisis had "been brought to an end."

The militants took over the In Amenas plant on Wednesday, but Algeria's military launched a rescue attempt on Thursday.

The Algerian Press Service reported that a during a final attack by Algeria's military, the militants killed seven hostages, whose nationalities were not revealed. All of the remaining militants were reported killed.

At a joint press conference with U.S. Defense Secretary Leon Panetta, Hammond described the loss of life as "appalling and unacceptable."

"We remain in close contact with the Algerian government," Hammond said. "We remain determined to defeat terrorism and stand with the Algerian government."

Hammond said that the latest Algerian military operation had resulted in further loss of life. "We are pressing the Algerians for details on the exact situation and the numbers that have been killed and, if any, the numbers rescued," he said.

The Associated Press reported that around 100 of the 135 foreign workers on the site had been freed by Friday. The U.S. government confirmed Friday that one of the dead hostages was Frederick Buttaccio from Texas.

The militants claimed Friday that they were holding two American hostages and would exchange them for two people being held in the United States — the blind sheik Omar Abdel Rahman, convicted in the 1993 bombing of the World Trade Center, and Aafie Siddiqque, a 40-year-old Pakistani neuroscientist and mother of three, who was convicted of attacking U.S. soldiers in Afghanistan.

That would appear to account for all five Americans thought to have been at the plant, one U.S. official said, if the militants are telling the truth. 

In a statement Saturday, President Barack Obama said: "The blame for this tragedy rests with the terrorists who carried it out ... This attack is another reminder of the threat posed by al Qaeda and other violent extremist groups in North Africa." 

In a news release Saturday, British Prime Minister David Cameron said he feared for the lives of five British citizens who remained unaccounted for, Reuters reported.

Anis Belghoul / AP

Two British hostages -- Peter, left, and Alan, right (no family name available) -- are seen after being released, in a street near the gas plant where they were kidnapped by Islamic militants.

"One British citizen has already been killed in this brutal attack and we now fear the worst for the lives of five others who are not yet accounted for," Cameron said, according to Reuters.

British Petroleum said Saturday that four of its employees were among the hostages who remain missing.

In a conference call with reporters, Chief Executive Officer Bob Dudley said 14 of the 18 BP employees who were working at the site are “safe and secure” but four remain missing. Dudley said at this time he could not reveal the identities or nationalities of any of the employees. Dudley said the situation remains “very fluid and complex.”

Based on information from those hostages freed, Dudley said they suffered a “terrible and agonizing ordeal” and the situation inside the facility was “horrific.” Before “pre-judging” the actions taken by Algerian security Dudley said “we need he entire picture.”

The In Amenas plant, in a remote part of the Sahara Desert in eastern Algeria close to the Libyan border, is jointly run by BP, Norway's Statoil and Algeria's state-owned oil company.

Reuters and The Associated Press contributed to this report.

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One American was killed and two escaped unharmed from a natural gas complex in Algeria that was stormed by armed militants, U.S. officials said Friday. The fate of two others was unclear.

The officials said there was a total of five Americans at the In Amenas plant in eastern Algeria when the attackers seized dozens of hostages on Wednesday. The officials say two of the Americans managed to conceal themselves when the attack began and later escaped unharmed.

One U.S. citizen was found dead Friday by Algerian forces that had launched a raid on Thursday in an attempt to free the hostages, the officials said.

The deceased American was identified as Frederick Buttaccio, a U.S. official confirmed. Buttaccio's remains have been recovered from the plant and his family has been notified, the official said.

The official did not know the circumstances of Buttaccio's death.

Al-Qaida-linked militants claimed Friday that they were holding two American hostages and would exchange them for two people being held in the United States — the blind sheik Omar Abdel Rahman, convicted in the 1993 bombing of the World Trade Center and Aafie Siddiqque a 40-year-old Pakistani neuroscientist and mother of three, who was convicted of attacking U.S. soldiers in Afghanistan.

That would appear to account for all five Americans thought to have been at the plant, one U.S. official said, if the militants are telling the truth.  

On Friday, the Algerian military had launched a second raid on the multinational cabal of kidnappers — led by a one-eyed al-Qaida associate — who laid siege to the In Amenas gas plant on Wednesday, state TV reported.

The situation was fluid, but the U.S. said one thing was carved in stone: It would not be cutting any deals with the captors.

"The United States does not negotiate with terrorists," State Department spokeswoman Victoria Nuland said of reports the militants were seeking the release of Sheik Omar Abdel Rahman, who is serving a life term for the 1993 bombing of the World Trade Center, and Aafia Siddiqui, a Pakistani scientist convicted of trying to kill U.S. soldiers after being arrested in Afghanistan in 2008.

Nuland confirmed there were Americans still being held alive but did not say how many.

The official Algerian news service APS said a total of 132 foreign nationals were taken hostage, and 100 had been freed by midday Friday. It said more than 500 Algerians had also been rescued.

Citing a security source, APS said 12 hostages, including some Westerners, were killed when Algeria staged its first rescue raid on Thursday without consulting other countries in advance. Eighteen militants were killed, it reported.

McFaul family via Reuters

Belfast native Stephen McFaul (right) is pictured with his sons Dylan (left) and Jake in this family handout photo taken four years ago and made available Thursday.

NBC News could not confirm the figures. The French government confirmed one of its citizens had died, and its defense minister said in an interview on France 3 TV Saturday morning that he believed no more French nationals were being held at the plant.

One worker told Reuters that the hostage-takers were out for blood.

"The terrorists told us at the very start that they would not hurt Muslims but were only interested in the Christians and infidels," said the man, who gave his name as Abdelkader. "'We will kill them,' they said."

The brother of escapee Stephen McFaul said the hostages had their mouths taped and their necks draped with explosives. They were being trucked around the compound when the Algerian military hit the compound with explosives, he told Reuters.

"The truck my brother was in crashed and at that stage Stephen was able to make a break for his freedom," Brian McFaul said after speaking with his brother’s wife. "He presumed everyone else in the other trucks was killed."

A French catering employee who worked at the plant said he spent 40 hours hiding under a bed after the militants stormed in Wednesday with a spray of gunfire, only emerging when the soldiers arrived.

"I could see myself ending up in a wooden box," Alexandre Berceaux told Europe 1 radio.

One rescued hostage told Algerian TV that the ordeal was an "exciting episode" and he was "impressed" with the army.

"I feel sorry for anybody who has been hurt, but other than that, I quite enjoyed it," the man said.

Algerian TV via Reuters TV

A British escapee, interviewed by Algerian TV, says the Algerian army did a "fantastic job" with Thursday's rescue.

Another said he was "very, very relieved to be out."

"Obviously, we still don't really know what is happening back on the site, so as much as we are glad to be out, our thoughts are with colleagues who are still there at the moment," he said on Algerian TV.

The militants' attack on the plant, operated in part by BP, was reportedly masterminded by Mokhtar bel Mokhtar, an Algerian with ties to al-Qaida who specializes in lucrative kidnappings and smuggling, according to U.S. officials. He earned the nickname Mr. Marlboro for trafficking cigarettes.

The raiding jihadists were described as a motley crew by an escaped radio operator who told Reuters: "Some were clean, others were dirty, some with beards, others without, and among them a French national with sunglasses."

The Mauritanian news agency ANI reported the group was retaliating over French military action against Islamic incursions in neighboring Mali. But the French operation began just a week ago and the assault on the plant appeared to be long-planned.

On Friday, another possible motive emerged, as ANI said the militants put forth the offer of the prisoner swap.

The offer was not verified by NBC News, but an ANI editor told The Associated Press the kidnappers’ spokesman began calling Thursday with "sounds of war in the background" and "threatened to kill all the hostages if the Algerian forces tried to liberate them."

British Prime Minister David Cameron told the House of Commons in London that Algeria maintains it green-lighted Thursday’s rescue raid because hostages’ lives were in danger when it appeared the militants were trying to spirit them out of the compound.

Secretary of State Hillary Rodham Clinton said she spoke with the prime minister of Algeria on Friday and requested that the "utmost care" be taken to protect the hostages.

"This is an extremely dangerous situation," she said. "No one knows better than Algeria how ruthless these groups are."

Kari Huus, Catherine Chomiak and Courtney Kube of NBC News and The Associated Press and Reuters contributed to this report.

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