BA stops Pakistan flights after bomb

British Airways has suspended its flights to Pakistan because of security fears after a huge suicide truck-bomb blast at an Islamabad hotel killed 53 people at the weekend, an airline spokesman said today.

The Czech ambassador and at least three other foreigners were among those killed in Saturday night’s blast at the Marriott Hotel, Islamabad’s worst bomb attack, which wounded scores and which security officials said bore the hallmarks of al Qaeda.

There has been no claim of responsibility but the government said it expected the investigation would lead to al Qaeda and Taliban militants in the Federally Administered Tribal Areas on the Afghan border.

The beleaguered Pakistani rupee (PKR=) sank to a new low, trading at 78.55 to the dollar on Monday compared with 78.15/25 at the close on Saturday.

The blast reinforced investors’ negative attitudes after months of political uncertainty, a currency dealer said.

In a sign of growing international unease about deteriorating security in nuclear-armed Pakistan, British Airways said it had suspended its six flights a week to the country.

“Our people at headquarters are reviewing the security situation,” said airline spokesman Sohail Rehman.

The bombing has also raised fresh calls for Pakistan’s government to rethink its alliance with the United States and military operations against Islamist militants, which many Pakistanis blame for inciting violence.

Pakistan’s army is in the midst of an offensive against militants in the Bajaur region on the Afghan border, while the United States has intensified attacks on militants on the Pakistani side of the border, infuriating the Pakistani army.

A security official said troops had fired at two U.S. helicopters that intruded into Pakistani air space on Sunday night, forcing them back to Afghanistan.

Elsewhere, troops were attacking militant hideouts, a military spokesman said.

“Our security forces are engaging militants with artillery fire and targeting their hideouts,” said the spokesman, Major Murad Khan. The government says more than 600 militants have been killed in fighting in Bajaur since August.

But a senior opposition politician said offensives were not working and the government should rethink its policy.

“Enough force has been used but what’s the result? An increase in terrorist activities,” said Zafar Iqbal Jhagra, a vice president of former prime minister Nawaz Sharif’s party.

“The war on terror will be another disaster if we keep following this course,” he said, adding some troops should be withdrawn to show that authorities were serious about talks.

Islamabad police chief Asghar Raza Gardezi said no arrests had been made in connection with the blast and declined to give any details about the hunt for evidence.

Among the foreigners killed on Saturday were a Vietnamese woman and two members of the U.S. armed forces assigned to the U.S. embassy. A U.S. State Department employee was missing, an embassy spokesman said.

Denmark’s security service said one of its staff, attached to the Danish mission in the capital, was missing and presumed dead.

The Interior Ministry said 266 people were wounded, 11 of them foreigners, after the bomber blew up a truck packed with 600 kg (1,320 lb) of explosives, including artillery shells.

A political analyst said despite widespread scepticism about government security policy, the severity of Saturday’s bombing should have convinced more people the military was not just fighting America’s war.

“Your state is being challenged and people are coming and killing innocent people … what do you negotiate with them?” said Shafqat Mahmood, a former government minister and analyst.

Authorities could take advantage of anger over the attack, he said. “This is a popular government not a military government, it has support among the people. They can mobilise their support for fighting real challenges,” he said.

Financial analysts said the bombing would be a blow for foreign investment but not a fatal one unless it marked the beginning of a new phase of violence.

“In the near-term, investor sentiment, which is already running weak, will be further dented,” said Asif Qureshi, head of research at Invisor Securities Ltd.

The cost of buying protection on debt from Pakistan rose after the attack. A five-year CDS (credit default swap) (PKGV5YUSAC=MP) was not traded but a dealer said it was quoted at 1,500 basis points, about 50 bps wider than Friday.