Thus the world's most notorious pariah state, armed with its half-built hoard of chemical, biological and nuclear weapons, tried to embrace the planet's most prolific terrorist. It was the stuff of the West's millennial nightmares, but US intelligence officials are positive that the meeting took place, although they admit that they have no idea what happened.

Bin Laden's hosts, the hardline Taliban militia which rules Afghanistan under Islamic auspices, have vowed publicly to stand by him.But they are at the same time discussing with his worst enemies -- the Saudi monarchy and the American government -- his eventual departure from Afghan soil.

Bin Laden must surely have felt the noose begin to bite when he heard the news of the Taliban's meeting this week with a US assistant secretary of state, Karl Inderfurth, in Islamabad. But the most wanted man in the West may be at his most dangerous when cornered. And the increased pressure makes the prospect of a Saddam Hussein-Osama bin Laden alliance, once an improbable marriage of opposites, seem a more credible threat.

US embassies throughout the Middle East have been on alert since December, when the CIA found what it called `strong and credible evidence' of an imminent attack by members of Bin Laden's multinational organisation al-Qaeda (the Base). The US government has spent $2 billion on counter-terrorist measures since the August embassy bombings.

The Pentagon has set up national guard rapid response teams in 10 states around the country.Overseas, US embassy windows are being coated with protective film to prevent them disintegrating into lethal shards under the impact of a blast. As Bin Laden plans more attacks on the `infidels' he regards as a contaminating presence at the Islamic holy sites of his home country, American and British intelligence services plot their own strategy. They aim to block his moves and contain him while waiting for a chance to strike themselves.

It is an unending game of chess between terrorism and counter-terrorism in which last year's multi-million dollar cruise missile strikes are merely the bluntest weapons. Even before the embassy bombings in Africa, US special forces had been rehearsing daring `grab raids' aimed at fighting their way into Bin Laden's mountain lair in Afghanistan and either abducting or assassinating him. But such an operation would almost certainly involve high American casualties and -- like missile attacks -- would require highly accurate information about the whereabouts of BinLaden.

According to journalists who visited him in December, the ascetic Saudi radical is these days more cautious than ever, continually shifting between tented camps and caves and never using satellite phones lest they betray his position to the US spy satellites that constantly hover overhead.

There has been at least one assassination attempt in recent months, carried out by Saudi intelligence. Bin Laden accused the governor of Riyadh, Prince Salman bin Abdul-Aziz of offering $267,000 to three men to carry out the execution. Whether as a result of the assassination attempt or not, Bin Laden is unwell. Bin Laden has denied such reports and claimed that he remains sufficiently vigorous to play football and ride horses. But the journalists who met him in December said he was walking stiffly and leaning on a walking stick.

While waiting for a chance to grab Bin Laden or get a clear shot at him, his enemies are constantly striving to narrow his room for manoeuvre and fold up his sprawling financialnetwork one bank account at a time. `He's certainly feeling the pinch; he can't use his satellite phone and he can't travel for fear of being kidnapped,' said one British counter-terrorism expert. `He's pretty much in a box and there are signs that action against his financial resources may have started to work.'

Mamoun Fandy, a politics professor at Washington's Georgetown University, believes that the pressure will eventually take effect. In his new book, Saudi Arabia and the Politics of Dissent, to be published later this month, Fandy writes: `The Taliban protection is not likely to continue forever. Taliban as a movement is subject to global pressures, especially from the US and Saudi Arabia. Previously, under pressure from both, Sudan expelled Bin Laden from its territory. Under similar pressure, the Taliban may find it profitable to do likewise.'

It is at this moment, with Bin Laden increasingly vulnerable, that the Iraqi offer of shelter materialised from the mysterious figure of FaroukHijazi. Hijazi's arrival as Iraqi ambassador to Ankara last year was seen by Western intelligence analysts as Saddam's attempt to beef up his espionage and weapons procurement network in the region. If Bin Laden can be wrinkled out, it will be a significant victory for the West's billion-dollar counter-terrorism machine, but no one on either side of the Atlantic believes it will spell the end of hostilities with radical Islamic groups.

`It's dangerous to characterise him as the be all and end all of this problem,' said one British-based expert. `Bin Laden has faithful lieutenants so even if he's assassinated the phenomenon isn't going to go away.'

The paradox of the Bin Laden manhunt is that its target is, in many ways, the joint creation of the Saudi and Western intelligence services, a result of their covert war to drive the Soviet Union out of Afghanistan. Under the great organising principle of the Cold War, with Margaret Thatcher and Ronald Reagan doing their double act against the evil empire, theirenemy's enemy was their friend.

Yet after the Soviet army left Afghanistan, it soon became clear that a dangerous genie had been let loose, as thousands of Egyptians and Algerians, Saudis and Yemenis, fired up by their victory over a superpower, went home to give a critical edge to indigenous Islamic fundamentalist movements which had yet to turn violent.

Now, while trying to undo the mistakes of the past, the US and Britain have to steel themselves for Bin Laden's promised next move. If his flirtation with Baghdad is consummated, the struggle with the implacable zealot from Saudi Arabia could be drifting towards an exceedingly bloody end-game.

The Observer News Service