NEW DELHI - Aid workers struggling to help hundreds of thousands of war-displaced people in Pakistan are preparing for even greater challenges as the army looks to expand its offensive against Taliban militants to the border with Afghanistan.

The month-long operation against insurgents in the picturesque Swat Valley and other parts of the northwest has caused one of the largest internal displacements in recent times, with around 2 million people forced to seek refuge in camps or with host communities. They join another half a million already uprooted by fighting since the middle of last year.

Speculation is rife that the military is set to launch a major offensive against Taliban fighters in their strongholds in the Federally Administered Tribal Areas (FATA), after clearing them from Swat and the neighbouring districts of Buner and Lower Dir.

"The whole area around the southern tribal agencies has been insecure and volatile for several years and now the army is clearly moving against the Taliban in South Waziristan, and the air force has bombed militant targets in Orakzai," said Michael Young, country director for the International Rescue Committee.

"All the signs are that this conflict will escalate in the next couple of weeks. There is real potential for a humanitarian catastrophe. We're preparing the best we can given the limited funding currently available."

Around 30,000 people have already fled South Waziristan, and are staying with friends and relatives in other areas, according to the government. If an offensive gets underway, the authorities estimate 300,000 could be displaced, but aid agencies fear the number could be higher.

"Our concern is that the campaign would widen, as we've seen in the northern tribal agencies and Malakand Division," said Young. "If that happens, then projections of 300,000 new displaced are conservative. We're planning on the basis of upwards of half a million more people forced to flee their homes in the tribal agencies."

TRIBAL AREAS OFF-LIMITS

To make matters worse, U.N. agencies do not have access to the four districts - Kohat, Bannu, Dera Ismail Khan and Tank - where those fleeing from Waziristan are arriving. These areas are highly insecure, and kidnapping and militant violence is endemic.

Officials from the U.N. refugee agency (UNHCR) want to begin registering the newly displaced so they can access aid, while helping authorities identify and manage camp sites. But this work will have to be done remotely.

"It's a totally different ball-game down there and the complication is that humanitarians really have no access to anywhere west of the Indus River as it's very dangerous," said Kilian Kleinschmidt, UNHCR assistant representative in Islamabad. "We will have to find very innovative ways of registering and assisting people - possibly working with tribal youth and mobilising the community."

Even this type of hands-off approach could prove tricky, as analysts say that, unlike in Swat, the civilian population along the Afghan border does not support the Pakistani army and is unlikely to cooperate with the authorities.

"All the NGO workers, teachers and administrators have already left, so you have a bunch of people whose source of information is the local mullah (Islamic cleric), and if the military goes in heavy-handed, you get into blood feuds and the whole clan will have to have some kind of revenge against the Pakistani state, and then it all gets really out of hand," warned Gareth Price, head of the Asia programme at London-based think tank Chatham House.

Due to the high level of sympathy for the Taliban in FATA, the army may cordon off the conflict zone, preventing entry and screening those coming out. That would raise serious concerns for humanitarian agencies seeking to protect civilians and their rights.

MORE MONEY NEEDED

One of the biggest constraints for the humanitarian response is a lack of funds. The aid community, along with the government, launched an appeal in early May for $543 million to sustain 1.5 million displaced people until December.

So far only 22 percent of that money has been received, while the number of displaced continues to climb. Aid agencies say they're running out of money, with one group working in the camps warning it has only two weeks of essential medicines left.

Major donors have pledged funds in recent weeks, but most of the money has yet to materialise. Aid workers are worried about how they will support a new wave of displaced civilians if the military offensive expands quickly.

Manuel Bessler, head of the U.N. Office for the Coordination of Humanitarian Affairs in Pakistan, said resources for those uprooted from Swat could not be diverted, and additional funding and staff would have to be found to respond to any fresh displacement further west.

Chatham House's Price said it was essential that aid money should be spent not only on patching up the damage done by the military offensive but also used to improve living conditions for Pakistan's poor rural communities in the longer term.

"The logic is that (the displaced) go back and the government really invests in all the things it should have been doing for the last 40 years...rebuild some local institutions and get everything working so that the people themselves are the buffer against the Taliban," he said.

Price believes that winning the ideological war will require a much greater commitment to development than Pakistan's politicians have shown in the past.

"If people don't see the development and yet hear that lots of money has gone in, that's good for the Taliban," he said.

(Additional reporting by Megan Rowling in London)

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