The assassination of Ahmed Wali Karzai in Kandahar July 12 is one of those moments when the long and bloody Afghanistan war suddenly comes into focus. It is not a picture one is eager to put up on the wall.

Karzai, a younger half brother (because their father had multiple wives) of Afghan President Hamid Karzai, was the Kabul government's viceroy in southern Afghanistan. What his nickname, "the king of Kandahar," translates into is "warlord." He controlled everything from the movement of drugs to the placement of car sales agencies. Want to open a Toyota dealership? See "AWK," as he was also known, and come with a bucket load of cash.

AWK's power, according to the Financial Times, "lay in a mafia-style network of oligarchs and loyal elders, funded, according to U.S. media reports, by heroin trafficking." He was also on the CIA's payroll. No truck moved through the south without paying him a tax. No United Nations or North Atlantic Treaty Organization (NATO) projects could be built without his okay. In case someone didn't get the message, his Kandahar Strike Force Militia explained it to them. Next to AWK, Al Capone was a small-time pickpocket.

So was Jan Mohammed Khan, assassinated July 17, a key ally and advisor to the Afghan president, and a man so corrupt that the Dutch expeditionary forces forced his removal as the governor of Uruzgan Province in 2006.

The entire U.S. endeavor in Afghanistan—from the initial 2001 invasion to the current withdrawal plan—has relied on a narrow group of criminal entrepreneurs, the very people whose unchecked greed set off the 1992-96 Afghan civil war and led to the victory of the Taliban.

AWK was a member of the Popalzai tribe, which along with the Alikozai and Barakzai tribes, has run the southern provinces of Kandahar and Helmand since the early 1990s, systematically excluding other tribes. According to the Guardian's Stephen Gray, "The formation of the Taliban was, in great measure, a revolt of the excluded."

When the Americans invaded, "AWK and the Barakzai strongman and former Kandahar governor Gul Agha Sherzai not only seized control of NATO purse-strings by acquiring lucrative contracts, but they also manipulated U.S. intelligence and Special Forces to gain help with their predatory and retaliatory agenda," says Gray, harassing and arresting Taliban members until they fled to Pakistan.

AWK not only poured money into the coffers of the Kabul government, he insured a second term for his brother by stuffing ballot boxes in the 2009 election, and he was a key actor in identifying targets for U.S. night raids. It is the success of these night raids in killing off Taliban leaders that has allowed the Obama Administration to claim a measure of victory in the Afghan war and to lay the groundwork for a withdrawal of most American troops by 2014.

With U.S. polls running heavily against the war—59 percent oppose it—and with more than 200 votes in Congress for speeding up the withdrawal timetable, the White House wants the war to be winding down as the U.S. goes into the 2012 elections.

For the Afghan central government and the Obama administration, then, AWK was probably the most powerful and important warlord in the country.

As in chess, there are winners and losers when a major piece falls.

The assassination has dealt a serious blow to the Americans. The rosy picture of progress painted by the U.S. Defense and State departments is shot to hell, literally. The Taliban have demonstrated that all the hype on "improved security" is about as real as an opium dream. Even if the assassination was due to a personal quarrel rather than a Taliban hit, few will believe that is so, particularly after Khan's assassination just five days later.

While the Kabul government has appointed another Karzai in AWK's place, there is almost certainly going to be a bloody internecine battle among surviving Kandahar power brokers. A major infight will end up robbing Kabul of much needed funds and further isolate the government. The only hope for the Karzai government now is to ramp up talks with the Taliban while Kabul still has some power and influence.

And that fact puts Pakistan in the driver's seat, because there will be no talks without Islamabad. The Americans need these talks as well, so don't pay a lot of attention to the White House's huffing and puffing over aid.

In any case, the decision to cut some $800 million in aid to the Pakistani military has been less than a major success. Pakistan Defense Minister Ahmed Mukhtar told Express TV that "If Americans refuse to give us money, then okay…we cannot afford to keep the military out in the mountains for such a long period."

Pakistan currently has tens of thousands of troops on the 1,500-mile Pakistan-Afghan border, fighting an insurgency that did not exist until the American invasion drove the Taliban into the Tribal Areas and the Northwest Territories. From Pakistan's point of view it is fighting its own people, and losing up to 3,000 soldiers and civilians a year, because of Washington's policies in the region.

One loser is India, even though in the long run peace in Afghanistan will allow New Delhi to reap the rewards of a Central Asia gas pipeline. In the short run, however,Indian diplomacy in the region has badly misfired. India intervened in Afghanistan— providing more than a billion dollars in aid—in order to discomfort Pakistan.

But in 2009 New Delhi withdrew its support for the Karzai government because India was convinced the Americans were about to jettison the Afghan President. That never happened, but Karzai decided that his long-term survival lay in making peace with the Taliban, which in turn meant warming up ties with Islamabad.

In the meantime, Pakistan—fearful of India and suspicious of the U.S.—tightened its ties with China (discomforting the Indians even more). In fact, in the end, China may be the big winner. Beijing runs a huge copper mine and seems to have no trouble getting its ore out of the country, which suggests there is a deal among China, Pakistan and the Taliban to keep the roads open. China is also building a railroad, as well as exploring for iron ore and rare earth elements.

There are other potential winners here as well. Iran has traditionally been involved in northern Afghanistan, where it has roots among the Tajiks, who speak a language similar to Iran's Farsi. Iran also has close ties to the Shiite Hazaras and pumps aid into western Afghanistan. Iran's help will be essential if the Tajiks, Hazaras and Uzbeks are to join in any peace agreement.

Whatever the final outcome, the U.S./NATO adventure has been an unmitigated disaster. With Europeans overwhelmingly opposed to the war, there is a stampede for the exit by virtually every country but Britain and the U.S. In the end, Afghanistan may well end up the graveyard of NATO.

Conn Hallinan can be reached at: ringoanne@sbcglobal.net