Pakistan's wild frontier, where crisis with the West is seen from a moral high ground

They tie black rags onto the lavishly decorated buses that career around Peshawar, swerving around donkey carts and camels. This is a superstition, a means of preserving the passengers crammed within from evil and ill fortune.

This rough-shod city in Pakistan's wild border country has seen too much of this already. And yesterday, as American and British forces prepared to unleash their massive onslaught against Iraq, it was awaiting more.

The slide towards invasion and war was monitored here in the capital of Pakistan's North West Frontier province – a city once home to Osama bin Laden – with an intense interest, with indignation and amazement. Every new development was eagerly consumed. The city has many internet cafés. Yesterday, they were in heavy use.

Peshawar's citizens have historically paid a heavy price for being the gateway to the Hindu Kush mountains, Great Game territory that forms part of a trading route and has been a launching pad for outsiders with designs in Afghanistan.

The CIA, the Saudis, the Pakistani intelligence services, drug barons, neighbouring warlords and others have done their worst over the years, leaving it awash with guns, refugees, and religious zealots.

Four months ago popular anger over the American bombing of Afghanistan helped elect a provincial government controlled by pro-Taliban mullahs. The mullahs have already begun introducing repressive laws, banning music on public transport and burning videos.

No surprise, then, that it was impossible to find anyone wandering the seething streets of Peshawar's Old City yesterday who saw the American-British attack on Iraq in anything other than the most cynical of terms.

Time and again, they portrayed it as a military adventure that had nothing to do with Osama bin Laden, or weapons of mass destruction, or bringing peace to Israel and Palestine, and everything to do with stealing Iraq's oil. There was no angry anti-Western abuse, none of the finger-jabbing ranting that you often hear on the streets of the Islamic world during crises with the West. There was no need. So convinced are people here that they hold the moral high ground in this conflict – and that the Americans and British are both morally wrong and acting illegally – that an uncharacteristic calm has befallen the debate. That might change when they see the mess that bombs make.

Wahid Khan al-Fridi, a banker aged 37, spoke for many. He had no particular time for the Iraqis or for Saddam Hussein, and was unimpressed by the guff about the Islamic world's fraternal feelings for fellow Muslims. After all, he said, didn't Iraq invade Kuwait, a fellow Muslim country? "But at bottom it is all about oil and world economies – and that's it," he said.

Yet Peshawar's residents know that the horrors now playing out in Baghdad belong to a sequence of events in which their city has played a leading part. The seeds that grew into al-Qa'ida were, in part, sown here. Nearly 20 years ago, a young Bin Laden set up a guesthouse for the thousands of Arab jihadis flooding in to sign up for the CIA-funded war against Soviet forces in Afghanistan.

It was home to several who became some of the most notorious figures associated with the movement that spawned the 11 September attacks: Bin Laden's mentor, Abdullah Azzam, who was assassinated by a car bomb outside a mosque, and Ayman al-Zawahiri, al-Qa'ida's second- in-command, who worked at a hospital for Afghan refugees. Not many miles away stands one of Pakistan's largest religious schools – one of hundreds whose numbers have been growing. Some call it the "Harvard of the Taliban".

During the last precious hours of peace yesterday, a knot of lawyers gathered in the tea room of Peshawar's High Court, scrutinising every argument that has been fielded by Messrs Bush and Blair, and rejecting each one.

"If this is about removing dictators, why have the Americans supported so many others in the past – including in Pakistan?" asked Latif Afridi, a former member of Pakistan's parliament.

Why, asked Abdul Raif Gandapur, had the Americans done nothing about serial violation of United Nations resolutions by Israel? And why, asked a third, had they ignored the findings of the UN weapons inspectors? And so it went on.

These men had followed every detail of the crisis – including the massive marches in London. "These made us very happy," Mr Afridi said. "It was an answer to those people who want to make this conflict into a battle between Christianity and Islam. It is not. It is a matter of human concern."

They all agreed that the unfolding events would strengthen religious extremism. This is more than merely theoretical. The mullahs, a bloc called the Muttahida Majlis-e-Amal, in charge of the provincial government provide the evidence.

Posters advertising movies have been torn down. The mullahs have attempted to censor cable TV. When that was blocked by the federal courts, they ordered that the cable lines be ripped out in some areas. Afrasiab Khattak, the chairman of Pakistan's Human Rights Commission, said a deodorant called "Sex Medicine" appeared on the market and was considered so offensive the local police chief made a bonfire out of the cans. There are worries a ban on co-education may be next.

All this is the work of religious pro-Taliban parties that have become the voice of the anti-war, anti-American sentiments in Pakistan, and whose ranks include men who openly lionise Bin Laden.

And the same mullahs now have the Americans and British to thank for strengthening their hands still further.