* Militant leader in Afghanistan once part of peace process
* Qari Bilal linked to Taliban and al Qaeda
* Now commands hundreds of insurgents in Kunduz fighting
* Has been released from Afghan jail at least once
By Mirwais Harooni
KABUL, Sept 4 (Reuters) - Afghan security forces are hunting a senior Islamist militant allowed to settle in the country in 2011 under a government peace plan but who is now leading hundreds of insurgents seeking to overrun the northern province of Kunduz, officials said.
The search for Qari Bilal, who according to the Long War Journal is from the Islamic Movement of Uzbekistan (IMU) group linked to al Qaeda and Afghanistan's ousted Taliban, comes months before most foreign troops are due to leave the country.
Afghan soldiers and police have been engaged in weeks of sometimes heavy fighting against militants led in part by Bilal, according to officials in Kunduz, a province of symbolic and strategic importance.
Kunduz was the last northern stronghold held by the Taliban during the U.S.-led war that ousted the hardline Islamist group in 2001, and is a trade route linking Afghanistan with the former Soviet republic of Tajikistan to the north.
It has been the scene of intense clashes as insurgents opposed to the Western-backed government in Kabul and the presence of foreign forces seek to take control of districts surrounding the provincial capital.
Taliban fighters and their allies have launched a wave of attacks this year, and the involvement of a known militant held in jail at least once since 2011 will be of concern to NATO and Afghan forces urgently seeking to impose stability.
Police said clearance operations against the militants had been successful, and that the government had regained control of most areas of Kunduz.
But provincial governor Ghulam Sakhi Baghlani said on Tuesday that at least three districts out of a total of seven were still under the control of Bilal and Mullah Abdul Salam, another militant leader he identified as the Taliban's "shadow governor" of the province.
"(Bilal and Salam) have hundreds of Afghan and foreign insurgents under their command," Baghlani told Reuters.
The offensive in Kunduz is part of a broader pattern of ambitious attacks by the Taliban this summer across the country.
Emboldened by the political crisis in Kabul, where presidential rivals are at loggerheads, and the withdrawal of foreign combat troops by the end of 2014, militants have launched unusually big offensives in the north, east and south.
FLEEING, RETURNING, FIGHTING
According to a police spokesman, Bilal fled to Pakistan after 2001 and entered Kunduz through a government peace body, established by presidential decree in 2005, some 10 years later.
He said Bilal subsequently returned to the insurgency, and was arrested and released twice by Afghan authorities.
Documents viewed by Reuters at the Attorney General's office in Kunduz, however, indicated that Bilal was arrested only once and served his prison term of 18 months before being set free.
Either way, Bilal's story underlines the difficulty Afghan authorities and their foreign allies face if they want to reintegrate militants into society and defeat the insurgency through amnesty as well as by force.
The NATO-led International Security Assistance Force (ISAF) defended the tactic.
"We have had a lot of success over the years with the reconciliation process," said David Olson, a public affairs officer for the ISAF Joint Command (IJC).
But critics said the process lacked the political vision and resources needed to bring the insurgency's foot soldiers and leaders into the fold in a meaningful way.
"Since the establishment of the peace process in Afghanistan, fighting has increased," said Farhad Sediqi, a member of parliament from Kabul. "Millions of dollars have been spent, but nothing has been achieved."
Haji Khan Mohammad, who was head of the National Independent Peace and Reconciliation Commission in Kunduz in 2011, defended the group's attempts to resettle Bilal in the province.
"If he has now turned into an insurgent, that is not our problem," Mohammad told Reuters, adding Bilal's defection to the insurgency was partly the result of poor treatment at the hands of the justice system.
In a raid last week of Bilal's house in Kunduz, security forces found a letter from the commission ordering provincial officials to provide security for Bilal, according to police chief spokesman Sayed Sarwar Hussaini.
But after being resettled, Bilal helped plan several attacks in the province, including suicide attacks and the planting of roadside bombs, Hussaini said.
"MAJOR STEP BACKWARD"
Police in Kunduz said Bilal was arrested twice after his rehabilitation under the peace process - once by coalition forces in April, 2011, and later by Afghan forces - but was released by Afghan authorities in both instances.
In April, 2011, ISAF said a senior IMU leader was captured in a joint Afghan and coalition operation in Kunduz.
ISAF did not name the individual, but an Afghan official identified him as Bilal to a local media outlet at the time.
In February, Afghan authorities ordered the release of 65 detainees from the Afghan National Detention Facility, located in Parwan province north of Kabul, whom the U.S. military deemed to be "dangerous individuals".
"The release of these detainees is a major step backward for the rule of law in Afghanistan," said a statement from the United States Forces-Afghanistan at the time.
Afghan officials countered that the individuals had been imprisoned on charges that did not stand up to examination.
The peace and reconciliation commission has reintegrated several thousand insurgents into society, according to the organisation's web site, and assisted in the release of hundreds of prisoners.
In 2010, President Hamid Karzai formed the High Peace Council to add further impetus to peace talks with the Taliban, but the initiative has so far failed to produce a lasting settlement and violence is on the rise.
Wahidullah Rahmani, secretary of the High Peace Council in Kunduz, said that when Bilal joined the peace process in 2011 the procedure for reintegrating former insurgents was less vigorous than it is today.
"In our procedure, when a Taliban returns to normal life, elders of his village, the district governor, the provincial governor and other local officials have to guarantee that he will not turn back to the Taliban," Rahmani said. (Additional reporting by Feroz Sultani in Kunduz; Writing by Krista Mahr; Editing by Mike Collett-White)