A deep rift over anti-terror policy has opened up within Pakistan's political class, as extremist violence and an economic crisis push the country to the verge of collapse. A special session of parliament called by the government to forge a political consensus on the "war on terror" has backfired spectacularly as parties, including some in the ruling coalition, denounced the alliance with Washington and Nato rather than backing the army to take on the Pakistani Taliban.

A party in the coalition government, the religious Jamiat-Ulama-I-Islam party, has even demanded that, as parliamentarians had received a presentation from the army, Pakistan's Taliban movement should also be allowed to address them. It comes as the political and economic situation worsens, with intensified suicide bomb attacks and an alarming depletion in Pakistan's foreign exchange reserves. The country is seeking an emergency $10bn bailout from the international community, while a severe shortage of electricity is crippling business and punishing households.

Critics of the government, which is led by controversial president Asif Ali Zardari, complain that there is a paralysis of decision-making and policy. A leaked US top secret National Intelligence Estimate on Pakistan concludes that the country is "on the edge". A US official was quoted summing up the assessment as "no money, no energy, no government".

Yesterday a US missile strike inside Pakistan's tribal border area with Afghanistan killed up to six suspected militants, and a suicide attack on a police station in the north-west killed three officers and wounded 15.

The economic nosedive will aid recruitment to extremist groups, experts fear, and force more poor families to send their children to the free madrassa schools, which offer an exclusively religious curriculum. Inflation is running at 25%, or up to 100% for many staple food items, and unemployment is growing, pushing millions more into poverty. The rupee has lost around 30% of its value so far this year.

"The canvas of terrorism is expanding by the minute," said Faisal Saleh Hayat, a former interior minister.

"It's not only ideological motivation. Put that together with economic deprivation and you have a ready-made force of Taliban, al-Qaida, whatever you want to call them. You will see suicide bombers churned out by the hundred," he said.

The army is engaged in a bloody operation against militants in Bajaur, part of the tribal border area, and in Swat, a valley in the north-west. The Pakistani Taliban is closely tied to al-Qaida and is entrenched across the tribal belt with much of the north-west in its grip. Other militant groups have networks that span the entire country.

But there have been some positive security developments. An editorial yesterday in The News, a Pakistani daily, asks readers to "stand against terror", pointing out that some groups of tribesmen in the north-west have raised their own militias to fight the Taliban. It also wrote about a meeting of Islamic scholars in the eastern city of Lahore this week that issued a fatwa (edict) against suicide bombings.

The Pakistan People's party, which leads the coalition government that came to power in March after over eight years of army rule, had hoped to get parliamentarians behind the military action. An army general gave a confidential briefing to members of parliament. But the biggest opposition party, led by former prime minister Nawaz Sharif, called for the government to start talks instead with the extremists, without any preconditions.

"The majority of the people of Pakistan do not see it as our war. We are fighting for somebody else and we are suffering because of that," said Tariq Azim, a former minister in the previous government of Pervez Musharraf, whose party now sits in the opposition. "At the moment the only ones toeing the line are the People's party."

Members of parliament are particularly angered by recent signals from Washington that it is prepared to talk to the Afghan Taliban, while telling Pakistan that it must fight its Taliban menace. "They [the US] are showing a lot more flexibility on their side of the border," said Khurram Dastagir, a member of parliament for Sharif's party. "The US are trying to externalise their failure in Afghanistan by dumping it on us."

It seems that the best the People's party can hope for is a mildly-worded resolution in parliament, with a thin majority, far short of the consensus it sought at a time when the very existence of Pakistan is in peril from the threat of extremists.

Some parliamentarians, including the Awami National party, which is in the ruling coalition and based in the insurgency-plagued north-west, questioned whether the army was sincere in pursuing the extremists.

"There are still training camps, still [terrorist] sanctuaries, still cross-border movement in the tribal area," said Bushra Gohar, senior vice-president of the Awami National party. "There's duplicity, at some level, in our policies."