They read the jihad literature he freely passed out. They saw the mullahs regularly meeting at his home, where his sister drilled the Koran into the minds of schoolchildren. It didn't matter. They admired his devotion to Islam, they said, and always knew that the enemy Ali narrowed his sights on was elsewhere, far away from the rutted dirt roads and cotton fields of their sleepy mud-hut hamlet. Then, on a sunny July morning, their neighborhood blew up. Nine people died and 70 were injured in the explosion, which destroyed dozens of homes within a half-mile radius. The blast's epicenter was Ali's home, where police say he had stored half a ton of explosives, suicide jackets, rocket-propelled grenades and other munitions that probably detonated accidentally. Ali's home, police would later learn, was a depot and staging point for militants preparing terrorist attacks elsewhere in Punjab, the province regarded as Pakistan's heartland and home to densely populated cities such as Lahore and Rawalpindi. Investigators are now piecing together Ali's network of suppliers and facilitators, which may include a Taliban leader. Ali survived the blast and is in custody, as are several people suspected of working with him, including two brothers and a stepbrother. Police cannot explain how Ali, 36, amassed such large amounts of explosives or built bombs undetected for what they believe was nearly a year. His case raises another disturbing question as government and military leaders concentrate on flushing the Taliban from northwest Pakistan, many miles away: Are the leaders losing sight of the danger posed by militants in places such as south Punjab, where groups with Taliban links are plotting terrorist attacks? "These groups in Punjab have become a threat to Pakistan," said Lahore-based defense analyst Hasan Askari Rizvi. "They were ignored before because they weren't creating much of a problem." Authorities believe Ali belongs to Lashkar-e-Jhangvi, a Punjab-based Sunni Muslim militant group formed in 1996 and believed to be affiliated with Al Qaeda. For much of its existence, it directed sectarian attacks on Pakistan's minority Shiite Muslim community. More recently, however, the group, along with other Punjabi militant organizations, has strengthened its ties with the Taliban in Afghanistan and northwest Pakistan, sending young recruits to fight there and turning Punjab into a "factory where suicide bombers are produced," said Ayesha Siddiqa, an Islamabad analyst and writer. "What you have in Punjab is jihadism, pure jihadism," Siddiqa said. "The jihadis are not in the majority, but you don't have to be in the majority to overpower and influence behavior. Punjab has become a major recruiting ground and hub for the planning of terrorist attacks, and it's a human resource for the fighting in Afghanistan." Pakistani authorities have played a dangerous game with Punjabi militant groups, trying to control them without eliminating them. Some of those groups fought Indian rule in the mountainous Kashmir region and therefore enjoyed the backing of Pakistan's Inter-Services Intelligence agency. During his nine-year rule as president, Gen. Pervez Musharraf banned Punjabi extremist groups he deemed terrorist, but he never followed through on dismantling them. The groups have remained active since Musharraf stepped down in 2008 and President Asif Ali Zardari took office. Pakistani authorities linked Lashkar-e-Jhangvi members to the March ambush of the Sri Lankan cricket team in Punjab's largest city, Lahore, an attack that left seven people dead. Authorities also believe the group helped organize September's bombing of the Marriott Hotel in Islamabad that killed more than 50. Lashkar-e-Jhangvi was responsible for the 2002 kidnapping and beheading of Wall Street Journal reporter Daniel Pearl. As the military seeks to build on its success routing the Taliban from northwestern Pakistan's volatile Swat Valley and squeezes them in the lawless tribal areas along the Afghan border, authorities worry that those militants could flee in larger numbers to southern Punjab. They could fortify their alliance with Punjabi militant cells and establish a foothold in the country's heartland. "We suspect something similar [to the Swat Valley] situation may arise in south Punjab," Interior Minister Rehman Malik said during an interview with the Financial Times in June. "What we suspect is perhaps all those terrorists who fled from Waziristan or Swat might take refuge in south Punjab." Police believe Riaz Ali was a way station in the pipeline that ferried explosives and other munitions from the tribal areas' Waziristan region to southern Punjab. Investigators say they believe they found another node in that pipeline: a madrasa, or Islamic seminary, in the southern Punjabi town of Dera Ghazi Khan that police raided July 10. Authorities suspect that many similar setups dot the Pakistani landscape, but they lack the information to find them. Investigators believe Ali supplied suicide vests to the militants who attacked the Sri Lankan cricket team, though the vests were never used, said a police official in Lahore who spoke on condition of anonymity. Pakistani news reports have said that Ali had links to Baitullah Mahsud, who was Pakistan's most wanted militant and the Taliban's leader in the tribal areas. Mahsud is believed to have been killed in a strike by an unmanned U.S. aircraft Aug. 5, intelligence sources said. "He was definitely linked to people in the tribal areas carrying out terrorist acts," said district Police Chief Kamran Khan. Khan said that in recent months, law enforcement agencies have stepped up surveillance and investigation of suspected militants and madrasas potentially linked to militant groups. In deciding whom to scrutinize, Khan said, police rely on lists of locals who once trekked to Afghanistan for militant training. However, that database is incomplete. "When we saw that we didn't have enough intelligence on these Afghan-trained boys, we should have carried out exercises in every district," Khan said. "We should have tracked them down." Ali had been to Afghanistan to train and fight alongside the Taliban in the late 1990s and early 2001, a fact known to his village but not the police. In Ali's village on the outskirts of Mian Channu, a city of 500,000, people saw him not as a threat but as one of their own, an affable teacher of math and English at a grade school. His sister, Fatima, turned part of their home into a madrasa for dozens of 5- to-8-year-olds. "We knew that he was a jihadi and that he had been to Afghanistan, but we didn't know that he would be like this," said Mohammed Latif, 55, a cotton farmer whose face was covered with sweat in the blistering morning heat. "He was a good man, a religious man." Days after the explosion, some villagers visited the spot where Ali's house had stood, shaking their heads as they walked across the pitted ground. In the dirt courtyard of his home, Mohammed Javed, 34, sat alone on a wicker bed frame, his head wrapped with gauze after surgery to remove shrapnel from his skull. In a hushed, halting voice, he explained that he was driving passengers in his motorcycle rickshaw past Ali's house at the moment of the explosion. His four passengers, two of them children, were killed. "We used to think [Ali] was a good man," Javed said. "But how can we say good things about a man who destroyed his own village, who killed Muslims? Now we see who he really was." (latimes)