As the Mumbai attacks have made crystal clear, the situation in Pakistan sucks. Big Time.
If you have the slightest doubt about this, Bridget Johnson details why in a must-read piece that Glenn Reynolds linked earlier:

As the smoke clears and the body count grows in Mumbai, in one of the most brazen and chilling terrorist attacks we’ve seen in a long time, the truth about the region becomes crystal clear: Pakistan is a cancer on its neighbors. And the narrow focus of the attacks has also made it clear that Pakistan, allowing its extremists to operate unchecked, is also emerging as a greater threat to us.
It pains me to say that. I’ve been fortunate to know good men in the Pakistani government who seemed to seriously give a damn about their country, forced to constantly fight the negative headlines in an attempt to lure industry to the country and show the side of the nation that embraces Western ideals. But those guys were in Pervez Musharraf’s crew, and now there’s a new sheriff in town.

Barack Obama recognizes that the situation sucks, and while he didn’t use such crude language, he nonetheless made it an integral part of his campaign. Oh, and by the way, the new sheriff sucks:

Not implying, of course, in the traditional Western sense that this new sheriff has brought law and order. The ouster of Musharraf, which became a hot topic in our presidential campaign season, was supposed to enthrall lovers of democracy everywhere. But what has Asif Ali Zardari done since coming to power? Those are questions best answered by India and Afghanistan.
Even Pakistani media were acknowledging that the highly orchestrated, well-armed and well-trained attacks, with fighters coming across the sea from Karachi, indicated the involvement of Lashkar-e-Taiba, whose mouthpiece denied involvement in the attacks and amusingly went so far as to “demand an international inquiry” to clear their, ahem, good name. The group is branded as a terrorist organization by Pakistan, yet operates out of Lahore and trains fighters in Pakistan’s share of Kashmir. And anyone who thinks that this week’s carnage is another plug for Kashmiri independence needs to remember that the targets were Americans, Britons, and Jews. That’s good ol’ fashioned Islamic terrorism. That’s an act of war.

Even if we were to put aside the attacks on Americans, Britons, and Jews (which no one in his right mind would do), this is a dire, dire situation. India and Pakistan have a long history of bitter enmity, and they are both nuclear powers. What bothers me the most about this is that I suspect a double pronged strategy: kill as many Americans and our allies as possible, and manipulate a historic grievance in the hope of jump-starting a war between India and Pakistan. Whether war between these two countries is inevitable or not, it should not be up to Al Qaeda to decide whether they go to war against each other.
Actually, I should have called it a triple-pronged strategy, because the enemy is taking advantage of the fact that we have a new president, whom they regard with undisguised contempt (they were quick to insult him with the racial epithet), and they’re probably hoping he’s so green and weak that he won’t stand up to them.
The strategy is despicably brilliant, which is why (despite much speculation) I’m sure Al Qaeda is behind it.
And what the hell, there might even be four prongs in their damned fork. With any luck, Pakistan will degenerate into complete chaos, and Al Qaeda’s operatives will make off with one of their nukes.
Again, despicably brilliant.
And again, we’re all in this together.