Of course, the US did not engage in military occupation of Pakistan, something that would be impossible and literally insane from a military, political, and economic perspective. However, NATO forces have become increasingly defiant of their host since September 2011, just as the people of Pakistan have become impatient with their government's tolerance of foreign troops violating national sovereignty.
At the time of Senator Graham's hyperbolic warning many in the US media argued that it did not necessarily reflect official US policy. Moreover, all the focus was on the lack of Pakistan's vigilance with border incidents and lack of cooperation that goes back for a number years, including in matters that has to do with intelligence. However, the reason the Senator's remarks caught public attention was because Pentagon officials reacted to it warmly, while Pakistan and China seemed very concerned that there was something behind the US threat.
The history of US-Pakistan relations from 1947 to the present has been one based on US military and economic aid in return for using Pakistan for geopolitical purposes. Because of the Cold War, Pakistan as a member of the Baghdad Pact (1955-1979), and because of India as a rival owing partly to the chronic Kashmir conflict, governments in Islamabad had to rely on the US, as it would have been very difficult for a Muslim nation to ally itself with a Communist regime during the Cold War.
Although Pakistan was part of SEATO and CENTO, both US-led military alliances intended to contain Communism and to keep as much of Asia integrated with the West, US-Pakistan relations were held together not by what the two nations had in common, but what they opposed, especially during the 1980s when the USSR invaded Afghanistan. With the Taliban in power in Afghanistan, and with al-Qaeda having major operation in Afghanistan and inside Pakistan, the US changed its position toward Pakistan after 9/11, forcing it to either accept US-NATO military operations against Afghanistan from Pakistani soil, or face the consequences.
After 9/11, US-Pakistan relations began to deteriorate, as the US hired contractors to engage in targeted assassinations, often killing innocent people, and engaging in drone warfare that has also resulted in the deaths of innocent non-combatants. On 26 November 2011, NATO air strikes killed 24 Pakistani soldiers along the Afghan border, despite repeated warnings from Pakistani officers to NATO command to stop firing even two hours after repeated shootings. Secretaries of State and Defense offered apologies for the lost lives, but the Pakistani government has heard such apologies before.
This is not the first time that NATO has struck at the wrong target inside Pakistan, and US government officials know that the Pakistani government must adopt a very hard line against the US, at least publicly, because the US is about as popular in Pakistan as it is in Afghanistan. This is a case where US bombings have put Prime Minister Yousuf Raza Gilani in a corner, forcing him to lash out at the US for failing to respect the national sovereignty of Pakistan.
Although the government ordered the US to leave the air base from which it has been conducting drone bombings, and although all bilateral talks are now on hold, my assessment of the situation is that Pakistan has nowhere to go, except to remain in the US military orbit of influence; at least until the troops are out of Afghanistan and as long as the billions in foreign aid keeps pouring into this poor nation.
China is now Pakistan's largest defense supplier, it is increasing its trade ties with Pakistan, and its economic relationship is keeping this Muslim nation afloat. However, China is not at all at ease about becoming Pakistan's sole patron, not just because it is concerned about some of the militant Muslim tribes, but it would not serve its broader interests to be identified so closely with Pakistan, nor would it help its delicate relationship with the US, India, and Russia.
China's foreign minister Yang Jiechi assured Pakistan's foreign minister Hina Rabbani Khar that Beijing remains committed to supporting "Pakistan's efforts in safeguarding national independence, sovereignty and territorial integrity." The Chinese foreign minister used language that widely appeals Chinese nationalists and military, but even more to the broad masses of Pakistan's population.
In reassessing its long-term role in Afghanistan and Pakistan, that is after troop withdrawal in a couple of years, the US would have to determine if spending billions in China's backyard is a good investment just to fight "terrorism" half wayb around the world from US soil. In my view, the recent move that the US made in expanding its trade bloc in the Pacific region (Asia Pacific Economic Cooperation summit - 17 November 2011), including arriving at a new military agreement with Australia is an indication that Washington has already decided that the future is well south and east of Afghanistan.