by Christina Lamb in Karachi

Osama bin Laden and the top Al-Qaeda leadership are not in Pakistan, making US missile attacks against them futile, according to the country's interior minister.

"If Osama was in Pakistan we would know, with all the thousands of troops we have sent into the tribal areas in recent months," Rehman Malik told The Sunday Times. "If he and all these four or five top people were in our area they would have been caught, the way we are searching."

He added: "According to our information Osama is in Afghanistan, probably Kunar, as most of the activities against Pakistan are being directed from Kunar."

Washington does not directly acknowledge its missile attacks on Pakistani territory by unmanned drone aircraft but Pakistani officials say the US has carried out more than 40 attacks inside its borders in the past 10 months, killing hundreds of people.

CIA officials claim these attacks have been highly effective in disrupting Al-Qaeda's ability to operate. However, Malik insists they are a waste of time because the Al-Qaeda leadership is on the other side of the border in eastern Afghanistan.

"They're getting mid-level people not big fish," he said. "And they are counterproductive because they are killing civilians and turning locals against our government. We try to win people's hearts, then one drone attack drives them away. One attack alone last week killed 50 people."

US officials in Islamabad say Pakistan's government is being disingenuous, claiming to oppose the drone attacks to win domestic support, while being quite happy to benefit from them.

On Friday two missiles fired from a drone destroyed a communications centre in South Waziristan that belonged to Baitullah Mehsud, the leader of the Pakistani Taliban responsible for a recent string of suicide attacks in Pakistan.

Pakistan's military admits it has been helped by intelligence from US surveillance flights over the tribal areas as well as the mountain region of Swat, where thousands of troops have been battling against another Taliban group which had taken over the area, forcing more than 2m people to flee.

Yesterday, the government told the refugees that it had cleared Taliban forces from most of Swat and they should return home.

Most refugees are reluctant, worried about continued hostilities and lack of food after fighting disrupted the harvest. Abdullah Yusufzai, a medical student who returned to the main city of Mingo-ra, said: "There is a real shortage of food and fighting is ongoing in the hills and the army is still blowing up houses of suspected militants."

The army has not yet caught the leaders of the Swat Taliban though the interior minister claims that the main leader, Maulana Fazlullah, has been hit twice and is badly wounded. "I'm quite confident we'll get them," he said.

"Not only have we killed most of them but we've also destroyed their hideouts and arms depots," he added. "We discovered long, wide tunnels they were using for weapons."

According to Malik, the families of the militant leaders had been discovered hiding in the refugee camps. Fazlullah's family was found in a camp in Haripur and taken into custody.

Troops will remain in Swat to prevent the Taliban from returning but the army's main focus is switching to the tribal areas of Waziristan, home to one of the area's fiercest tribes. South Waziristan is the headquarters of Mehsud, and the north is also a base of Jalaluddin Haqqani, an Afghan warlord with close links to Al-Qaeda believed to be responsible for the capture of an American soldier last week.

"Wherever these militants are, we'll get them out," said Malik. "The decision of the government is very firm - no mercy, no negotiation. They must surrender or die."

For all Washington's talk of an "AfPak strategy", he said, Pakistan's efforts to take on the Taliban their side of the border are being hampered by the failure of American and British troops in Afghanistan to monitor their side.

"Two years ago we were being criticised by the West for our ISI [Inter-Services Intelligence agency] helping the Taliban cross into Afghanistan," he said. "We have stopped the border crossing. Now we're finding the same situation - they're coming from the other side, bringing arms and fighters from Helmand into Baluchistan and into Waziristan. Should we say it's Afghan or western intelligence helping them?"

He argued that Nato troops in Afghanistan should have first sealed the border before stepping up the fighting. "If we can't seal it totally we should seal it as much as possible," he said. "If we can't have a wall, at least let's put up barbed wire."

"They should replicate what we've done," he added. "We have 1,000 checkpoints on our side - they have only 100, of which only 60 are working. It makes no sense to both be fighting either side of the border without stopping the militants crossing."

Karachi target

Political leaders have warned that Baitullah Mehsud, Pakistan's Taliban commander, is exploiting the political and refugee crisis to destabilise Karachi, the largest city in the country, writes Nicola Smith.

Thousands of Pashtun refugees loyal to Mehsud have fled to Karachi in the past few months to escape fighting in the northwest. More are expected to arrive from South Waziristan, on the border with Afghanistan.

This has led to fears that Pakistan's commercial capital, home to the banking industry and stock exchange, is becoming "Talibanised".

Syed Mustafa Kamal, mayor of Karachi, warned that Taliban insurgents are using their refugee status to establish strongholds.

Explaining that remittances were funding Taliban fighters, he said: "Karachi has become the revenue engine for the Taliban. If our enemies hit Karachi, then Pakistan's stability will be in question. Karachi is the fuel for Pakistan's economy."

The mayor claimed the city had 3,000 madrasahs (religious schools), which were closed to local students, and that the Taliban had begun to threaten women in short sleeves. Police said militants planned a terrorist strike.