In Pakistan's tribal zone, a ruthless war against the Taliban has driven more than a million from their homes

Guardian UK - Pakistani soldiers led the way into the long, cool cave that curled through the hillside, its clammy walls bearing the scrape marks of crude digging tools.

Torchlight illuminated a pile of abandoned clothes. Until six months ago these caves in Bajaur, at the northern end of the tribal belt, were home to Taliban and al-Qaida fighters hiding from CIA drones circling overhead, said Lieutenant-Colonel Asif Jamil. "Uzbeks, Chechens, local Talibs," he said, squinting in the faint light. "They dug 35 caves in this area. We've destroyed most of them."

Could Osama bin Laden have been among the fleeing cave-dwellers? The colonel didn't know, but thought it unlikely. Gary Brooks Faulkner, however, was betting otherwise. The 50-year-old American construction worker was arrested 129km north of Bajaur last week, in a remote forest in Chitral, a popular trekking destination. Armed with a sword, a pistol and a book of Christian verse, Faulkner declared himself on a one-man mission to find America's public enemy number one. Media reports have mocked the middle-aged vigilante, who suffers from kidney disease, as "Rambo" and "American Ninja". But he may not have been wrong to choose this part of Pakistan for his quixotic hunt.

While western attention most often focuses on Waziristan, at the other end of the tribal belt, experts say that the northern mountains, around Bajaur and Chitral, are a more likely location for the fugitive Saudi. In 2006, a CIA-operated Predator fired on a house in Bajaur in a bid to kill bin Laden's deputy, Ayman al-Zawahiri, who was due to host a dinner that night. The missile missed its target.

The obsession with catching foreign militants is not shared by most Pakistani officers, who see them as ghosts in their border war; fleeing shadows rarely captured, but sometimes killed by CIA drones. For them the more tangible enemy is the local Taliban. It is in that struggle that they claim to make strong progress – and even critics concede they are right. A series of sweeping military drives over the past year has cleared militants from Swat, South Waziristan and a large part of Bajaur. The offensive has broken the momentum of Tehrik-i-Taliban Pakistan, the largest Taliban group, scattered its leaders and reduced its ability to carry out suicide attacks. "They're on the run," said Colonel Nauman Saeed, the commander in Bajaur. "We're winning this war."

The question is at what cost. The army's unsophisticated tactics have resulted in human rights abuses, critics say, and could endanger the wider counter-insurgency goal: public support. The conflict in the north has displaced 1.3 million people from their homes, according to the UN. Those from Bajaur have been living rough for almost two years – and still see little hope of returning home.

One such victim is Hakeem Khan, a 60-year-old with a worry-lined face and a plastic leg. Khan was badly wounded 18 months ago when an army bomb blasted through his house during a battle with the Taliban for control of his village, Banda. Relatives rushed Khan to hospital in Peshawar, where doctors saved his life but had to cut off his leg. Now Khan and 15 relatives live in an unattractive, two-room house where the rent is exorbitant considering there are no windows and the water comes through a grimy pipe in the yard. Yet even here they are not safe. Last October, Khan's 25-year-old son was one of 120 people killed by a Taliban suicide bomber in a busy Peshawar market. Khan is still distraught. "I lost my leg in Bajaur; my son lost his life in Peshawar," he said, wiping away a tear. Perhaps understandably, he feels little loyalty to either side: "I don't care about the government or the Taliban. I just want to go home."

That may not be so simple. Despite army claims of victory in Bajaur, the conflict continues. Last week, a fierce battle 16km from Khar, the district headquarters, killed 38 militants and 10 Frontier Corps soldiers, according to official figures. Another battle in Mohmand, the neighbouring tribal agency, saw more than 50 troops kidnapped and dragged into Afghanistan. At least 15 have been released.

The war's human cost was highlighted by a recent Amnesty International report that described the northern frontier as a "human rights free zone". The report accused the military of indiscriminate shelling, extrajudicial killings and destruction of civilian homes. In Bajaur, the army has cleared every house along a 64km stretch of road between Khar and Loesam, a former Taliban stronghold. "The miscreants turned the houses into fortresses, so they had to be destroyed," said Saeed. Dismayed residents have been told they will have to be housed in two new villages.

Campaigners say such tactics can alienate local support. "People are getting the bad side of military operations. What they're not getting is a vision of the endgame," said Sam Zarifi, Asia director of Amnesty. "There is no political or development strategy."

Army officers insist they cannot come up with a strategy because western aid has not materialised. A $537m UN humanitarian appeal launched in February has attracted just $156m. A US plan to spend $750m on developing the area has so far made little progress.

Political tensions complicate the picture. In Bajaur, Saeed expressed outrage at a recent suggestion by the US secretary of state, Hillary Clinton, that some Pakistani officials "know" where bin Laden is hiding. "She said it out of sheer ignorance," he said. The colonel recently visited a German base in Afghanistan surrounded by poppy crops in a district where the Taliban was resurgent. "If Osama had to hide, would he do it in Pakistan, or in a country where 33 provinces have shadow Taliban governments?" he said.

The Taliban threat remains potent. This month, hundreds gathered on a sports field in North Waziristan to watch militants execute a man accused of killing his two brothers. Militants recently torched 50 Nato supply trucks bound for Afghanistan at a depot near Islamabad – the first such attack at the gates of the capital. And many civilians, caught between an aggressive military and a ruthless insurgency, remain ambivalent. Asked who they blamed for their troubles, a roomful of Bajaur refugees in Peshawar went silent. Finally, one man spoke up. "The Taliban," he said meekly. To win the wider war, Pakistan's army will need a greater show of hands in future.