Since the 1990s, PoK has been a hub of jihadi militancy, a fact that has recently been corroborated once again by the 26/11attacks in Mumbai. The confessions of the lone survivor of the attack, Ajmal Kasab and David Headley 24 (who was also involved in the attack) provide sufficient evidence that the perpetrators of the Mumbai attack received training in a militant camp in Muzaffarabad before landing in Mumbai via Karachi. There have been reports that Al Qaeda was strengthening its presence in PoK, and much speculation in the media that Osama Bin Laden was once hiding in the vicinity of Muzaffarabad- the capital of the so called Azad Jammu Kashmir.
Terrorist groups such as the Lashkar-e-Taiba developed strong linkages with the local population after the 2005 earthquake because of the extensive relief they provided to the people under the guise of Jamaat-ud-Dawa, a self proclaimed 'social welfare organisation', which has since been banned in Pakistan. The victims of the earthquake who were left to fend for themselves were provided much solace by these terror groups at least in the critical phase of the relief work. The spurt of arrests in Muzaffarabad and the adjoining areas after the Mumbai incident are a pointer to the existence of terror camps and militant activities in PoK. The militants have found it easy to operate there because of the poor socio-economic and political development of the region.
Following the 2005 earthquake, AJK received the attention of the international relief agencies. The large-scale arrival of international NGO workers forced the Pakistani government to shift Jihadi camps and establishments to interior areas. This brought about a slight reduction in their militant activities against India, particularly in J&K. Around the same time, serious rifts had been developing between the Musharraf regime and the overall Jihadi network due to the American pressure on Pakistan and large-scale misappropriation of funds provided to them by the ISI. In 2006, there was a confrontation between the leadership of the Jihadi groups in PoK and the top authorities of ISI and the Musharraf regime. The leaders of practically all Jihadi groups sat on a hunger strike at the Muzaffarabad office of the ISI. They warned the government of Pakistan to go to the people over the abandonment of the traditional Pak policy on Kashmir by the Musharraf administration. The subsequent breakdown in links between the Jihadi groups and the Pakistani establishment due to developments in FATA had their impact on PoK also where pro-Taliban militant groups carried out many attacks on Pakistani Army establishments. However, recently under General Kayani, a rapprochement of sorts has been achieved with a section of the of LeT and the Hizbul Mujahideen and anti-India Jihadi activities are resurfacing in PoK.
In 2010, the report by Freedom House brought out by the UN High Commissioner for Refugees (UNHCR), stated: A number of Islamist militant groups, including those that receive patronage from the Pakistani military, operate from bases in Pakistani-administered Kashmir. Militant groups that have traditionally focused on attacks in Indian-administered Kashmir are reportedly expanding their influence and activities in Pakistani Kashmir, including the establishment of new madrassas (religious schools) in the area. They have also increased cooperation with other militants based in Pakistan's tribal areas, such as the Tehrik-i-Taliban Pakistan (TTP). In August, the Pakistani government banned 25 militant groups operating within the country, including those focused on Kashmir. Although the government claimed to have raided and sealed off the Muzaffarabad headquarters of the LeT, also known as the Jamaat-ud-Dawa, other reports indicated that the group continued to operate training camps in the region. Tension between Islamist pro-Pakistan groups and pro-independence Kashmiri groups as well as some local residents has reportedly increased in recent years.
Several suicide attacks on Pakistani security forces have been reported in the media since June 2009. There have been references to a new militant outfit, Lashkar-e-Zil (LeZ) operating out of the area. LeZ is supposedly an amalgamation of several militant outfits including Tehrik-e-Taliban, Pakistan (TTP) led by Commander Hakimullah Mehsud, the Azad Kashmir chapter of the Harkat-ul-Jihad al-Islami (HUJI) led by Commander Ilyas Kashmiri, and the Lashkar-e-Jhangvi (LeJ) led by its jailed leader Akram Lahori. The situation in the PoK is expected to worsen further as the Pakistan military is under pressure to clamp down on militant outfits.