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Pakistans security outlook remained severe in the closing stages of 2011, as terrorists continued to stage bomb attacks in Peshawar and other cities with apparent impunity. Relations with the United States and neighbouring Afghanistan also reached crisis point.

The Pakistani-US relationship in particular plumbed to new depths in late November 2011, as US forces operating in Afghanistan attacked a Pakistani border post, killing 28 Pakistani troops. Islamabad accused the American forces of launching an unprovoked attack, while the Americans claimed to have responded to incoming fire. With US President Barack Obama offering condolences but declining to apologise for the incident, the Pakistani government ordered US forces to vacate the Shamsi airbase, which has been used by US Predator and Reaper unmanned aerial vehicles (UAVs) as a base from which to strike suspected militant targets. It also said it would boycott an upcoming conference on Afghanistans future due to be held in Bonn, and blocked NATO supplies entering Afghanistan by road.

Even before this episode, US-Pakistani ties had been in turmoil following the killing of Osama bin Laden by US Navy Seals in Abbottabad during an operation conducted without the permission of the Pakistani government. The behind-the-scenes chaos the raid had created in Islamabad spilled out into the open in November, when the Pakistani ambassador to the US, Hussain Haqqani, was forced to resign over the leaking of a memo in which he appealed to the then US Head of the Joint Chiefs of Staff, Admiral Mike Mullen, to protect Pakistans civilian government from a military coup. In September, shortly before retiring, Admiral Mullen had accused Pakistans military intelligence agency, Inter Services Intelligence (ISI), of co-operating with the Taliban-affiliated Haqqani network. In his memo, the Pakistan ambassador told Mullen that he would have the sections of ISI that co-operated with the Taliban disbanded in return for US help.

Relations with the Afghan government also came under severe strain, as Kabul decided to strengthen its ties with India, despite the unfavourable reaction that the move was bound to provoke in Islamabad. After Afghan President Hamid Karzai visited New Delhi in October and signed a new Strategic Partnership Agreement, India announced that it would begin training Afghan security forces ahead of the pull-out of NATO forces in 2014. The move came against a backdrop of generally improving ties between Pakistan and India. In November, Pakistan conferred Most Preferred Nation status on India in a step that should boost bilateral trade. Prime Minister Yusuf Raza Gillani and his Indian counterpart Manmohan Singh said they believed they were opening a new chapter in India-Pakistan relations. However, Indias improving relationship with Afghanistan remains hard for Islamabad to stomach, and it has the potential to derail further progress towards stable relations.

With the US seemingly starting to give up on Pakistan, Islamabads alliance with China began to assume even greater importance. Gillani met Chinese Premier Wen Jiabao in November and the two sides agreed to advance their economic and defence ties. The two countries are now also starting their push for export orders for their flagship joint military programme, the JF-17/FC-1 Thunder fighter aircraft, which they showcased at the Dubai Airshow in November. That month, the Pakistan Air Force confirmed it had now raised two squadrons of JF-17s, with a third due to be added in 2012. With American funding now likely to dry up, the Pakistani armed forces will become ever-more dependent on Chinese procurement and codevelopment.