Pakistan Airstrikes on Kabul Raise Risk of Major Escalation

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(Bloomberg) — Pakistan launched airstrikes on Afghanistan’s capital on Monday night, triggering a fresh exchange of accusations between the neighbors and raising the risk of a major escalation.

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Afghanistan’s Taliban government said the airstrikes killed at least 400 people at a drug treatment hospital. Islamabad denied the allegation, saying it targeted military infrastructure.

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Rescue teams are working to control a fire and recover victims’ bodies after the attack in Kabul, Hamdullah Fitrat, deputy spokesperson for the Taliban government, said in a post on X. The strike destroyed large sections of the 2,000-bed rehabilitation facility, he said.

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Pakistan said its armed forces carried out “precision airstrikes” that targeted Taliban military installations in Kabul and Nangarhar, according to a post on X by Attaullah Tarar, the country’s information minister. The targets included ammunition depots and technical infrastructure, he said, accusing the Taliban government of having made “false claims.” 

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The two sides have clashed repeatedly since fighting erupted along their shared border last month. Islamabad declared an “open war” with Afghanistan in February and has since struck military and other facilities deeper inside the country, including in the capital, Kabul. Pakistan accuses the Taliban of hosting militant groups that plan attacks inside its territory, an allegation Kabul denies.

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Pakistan also faces additional strain as it shares a border with Iran, which is currently involved in a war with the US and Israel, raising the risk of broader regional instability. The conflict with Afghanistan, along with energy concerns tied to the Iran war as oil prices surge, has wiped off returns from Pakistan dollar bonds this year. The debt is now on track to deliver losses of more than 5% since the conflict began in late February. The benchmark KSE-100 Index has fallen about 11% over the period.

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“Middle East accounts for half of Pakistan remittances and almost 100% of its oil imports. Volatility in oil prices are the main reason for current market reactions,” said Muhammad Awais Ashraf, the director of research at Karachi-based brokerage AKD Securities Ltd.

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While Afghanistan’s limited military capacity keeps the conflict reined in, the violence risks further destabilizing a part of Asia where the US, China and India all have significant interests.

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Deteriorating ties between the two sides are also linked to Kabul’s growing engagement with Pakistan’s longtime rival, India. Islamabad has accused New Delhi of backing both the Pakistani and Afghan Taliban — an allegation India denies. At the same time, Afghanistan and India have stepped up discussions on opening new trade routes that would bypass Pakistan.

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New Delhi waded into the latest tensions last week by condemning Pakistan’s earlier air strikes in Afghan territory. The comments drew a swift response from Islamabad, which called them “shamefully hypocritical.”

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Relations between Pakistan and Afghanistan have steadily deteriorated since the Afghan Taliban returned to power in 2021 following the withdrawal of US-led forces. Pakistan has reported a significant rise in violence in its border regions over the past four years.

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Operations won’t halt until Kabul stops supporting militant groups, Pakistan’s powerful army chief, Field Marshal Asim Munir, has previously said.

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Earlier this month, Beijing sent a special envoy to Afghanistan in an attempt to promote peace talks, after a truce brokered by Qatar and Turkey in October fell apart.

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—With assistance from Malavika Kaur Makol and Tooba Khan.

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(Updates with market reaction and more context.)

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