Tibetan and U.S. flags are waving everywhere in Dharamsala--and Beijing’s suspicions about the U.S. are just as obvious. The reasons for such distrust include a secret CIA operation in the Himalayas that brought American military support to anti-Chinese Tibetan rebels half a century ago. The effort ended tragically for Tibetans.

Such a bloodstained and shadowy history helps explain why this sleepy Indian hill station was a-twitter Friday. Nancy Pelosi, Speaker of the U.S. House of Representatives, came to town to call on the Dalai Lama, whose government-in-exile is based here. (The trip was scheduled before the Lhasa riots broke out March 10).

International reaction is much more pivotal now than it was in 1989, the last time PLA troops forcibly suppressed large numbers of Lhasa residents. If the global chorus of criticism grows, so will calls for a boycott of the Beijing Olympic Games due to be held Aug. 8-24-- something Beijing officials are desparate to prevent.

In Dharamsala, I awoke to see maroon-robed monks below my window studiously gluing American and Tibetan flags together to wave at Pelosi’s convoy. (Just a few hours earlier I’d finished filing an exclusive interview the Dalai Lama granted to Newsweek, his first to a print publication since the crackdown.)  Then long lines of school-kids marched past to welcome Pelosi’s delegation of nine Democratic and Republican Congress members. She’s the most senior U.S. official ever to visit Dharamsala, and the first foreign VIP to make the pilgrimage to Dharamsala since the crackdown. Even tiny children knew about the visiting “American Spee-kah”.

Draped in a special golden-colored kattah, the ceremonial Tibetan scarf, Pelosi addressed the emotional crowd at the government-in-exile’s headquarters. She called the Chinese crackdown in Tibetan communities “a challenge to the conscience of the world”. She said Beijing’s claims that the exiled spiritual leader had instigated the unrest made “no sense” and advocated an impartial probe of events in Lhasa, which remained under lock-down and inaccessible to foreign media or international observers. (The grim mopping up continues; government media says a couple suspects from Beijing’s list of about 20 of “Tibet’s Most Wanted” had already turned themselves in, along with more than 180 other suspects.) Not to be outdone in criticizing China, the presumptive Republican presidential nominee, U.S. Senator John McCain, also weighed in on Tibet during a visit to Paris, calling the crackdown “unacceptable”.

Meanwhile the Chinese Foreign Ministry pointed to more than 100 statements of support from foreign governments, which spokesman Qin Gang described as “clear proof that the international community is on the side of China.” Endorsements came from places like North Korea, Russia, Syria,Vietnam, Belarus, and Fiji (Need I say more?).

Just about the only really good international news, from Beijing’s perspective, was the opposition’s win in Taiwan’s presidential elections Saturday. Kuomintang party candidate Ma Ying-Jeou won with surprising ease – snagging 58 percent of the vote – despite predictions that the Tibet bloodletting had hurt his prospects. Identified with a more conciliatory stance towards Beijing, Ma vowed to forge closer economic ties with the mainland.

Beijing had to be relieved; Taiwan’s incumbent president Chen Shui-Bian had infuriated Chinese officials with his separatist agenda. At least one of the key players in Beijing’s quartet of top policy headaches--Taiwan, Tibet, Tiananmen and Falungong, or the “three T’s and an F” --appeared to be stepping back from the brink.

Without mentioning Pelosi by name, Foreign Ministry spokesman Qin Gang also reiterated China’s opposition to “any encouragement and support for the secessionist schemes of the Dalai Lama clique.” And in a hard-hitting commentary Saturday, the party mouthpiece People’s Daily made a strident call to “resolutely crush the ‘Tibetan independence’ forces conspiracy and sabotaging activities.” The paper alleged that violence had been “masterminded” by the Dalai Lama’s clique with the “vicious intention” of undermining the 2008 Olympics.

Sometimes you’ve got to wonder who’s writing the briefing books that feed China’s official statements. Take this one,  from a March 15 commentary for the state-run Xinhua News Agency; it called the Dalai Lama “the hand behind the cat's paws…a master terror maker.. the monk in a crimson cassock [who] has many tools of disguise.”

The commentary declared “it’s time for the international community to recheck their stance… if they do not want to be willingly misled. The Dalai Lama and his clique have never for a day refrained from violence and terror. His childhood teacher, an Austrian, was a Nazi, and it's no secret that for quite a long time after he fled to India, he kept a force, armed by his Western patron, for separatist activities.”

And who was that “Western patron”? That brings us back to the ill-fated CIA covert ops which some of us who’ve covered Tibet for decades jokingly dubbed the Bay of Yaks.  Here’s an investigative article I wrote about it, published in Newsweek in August 1999.  Since that pre-dates our online archives, I’m pasting the text here.  It makes for a long blog entry. If you read on, however, 99 percent of you will learn things you never knew before about long-running international intrigues in Tibet:

A Secret War on the Roof of the World
Spooks, monks and the CIA's covert gamble in Tibet
By Melinda Liu

In 1958, the Dalai Lama was a 23-year-old god-king on the verge of losing his realm. The Chinese communists were closing in, and Tibet's spiritual leader was desperate. That's when he first heard that the Central Intelligence Agency was stepping up its activities in his domain. The Dalai Lama's lord chamberlain arranged a meeting for him with two CIA-trained guerrillas, so they could demonstrate their skills. The Tibetan warriors pulled out a bazooka, fired it, then took 15 minutes to reload before they fired again. His Holiness was incredulous.

"Will you shoot once and then ask the enemy to wait 15 minutes?" he asked his disciples. "Impossible." But the lord chamberlain and other advisers were enthusiastic. Although the Dalai Lama would have to flee into exile in India, freedom fighters were already battling China's Army, and they had direct radio contact with the CIA. "They gave the impression that once I arrived in India, great support would come from the United States," the Dalai Lama told NEWSWEEK in an earlier interview. "It's a sad, sad story."

How the CIA took the Dalai Lama's disciples under its wing is one of the most exotic episodes in the annals of Western intelligence. The intimate details of Operation ST CIRCUS are only just now emerging, as retired spooks publish memoirs and graying guerrillas publicly contemplate the violent karma of their past. Tibetan veterans still fondly recall training secretly in Colorado with Americans they knew as "Mr. Ken" or "Mr. Mac," then parachuting into Tibet out of the silver C-130s they called "sky ships." Their operations scored spectacular intelligence coups--including, NEWSWEEK has learned, early hints that China was developing the atomic bomb.

Yet the Dalai Lama, a devout pacifist, was reluctant to cooperate with the CIA from the start. Washington's bureaucratic spymasters never really understood these maroon-robed idealists from the roof of the world. Some spies had an ethos that rarely allowed them to see beyond the next intelligence bonanza; the Tibetans were fighting for their eternal freedom. The spies and the monks did share common goals, especially the defeat of the communist Chinese. But looking back now--when Beijing's grip on Tibet is as tight as ever--many Tibetans and some ex-CIA operatives believe that this story was always destined to be a tragedy. "What began as a pure Tibetan resistance looked quite different when the CIA came in, making it easy for China to discredit it as 'Western imperialist activities'," says the Dalai Lama. "And the U.S. help was very, very limited."

The covert war began as far back as 1956, three years before the Dalai Lama, disguised as a bodyguard, mounted a horse and fled to India after a failed Tibetan uprising. Chinese commissars had annexed the Tibetan areas of Kham and Amdo. Then they told the Tibetan Khampas, a mountain people famous for horsemanship and sharpshooting, to surrender their guns. The Khampas resisted, and with advice from the Dalai Lama's elder brother, Gyalo Thondup, they turned to the CIA for help. Gyalo Thondup now says he didn't inform his exalted sibling about all of his intelligence connections at the time: "This was very dirty business."

U.S. officials were entralled by the fierce Khampas, many of whom wore pictures of the Dalai Lama in tiny silver amulets around their necks, charms they believed could ward off bullets. CIA agents saw them as "can-do guys," says John Kenneth Knaus, who handled Tibetan matters at the CIA from 1958 to 1965. "We romanticized them... They were orphans seeking to be adopted." Under a full moon in October 1957, the first two-man team of CIA-trained Tibetans took off from a grass airstrip in East Pakistan. They rode in a B-17 "sanitized" of all markings. The parachutists were Athar Norbu and another Tibetan named Lhotse--"Tom" and "Lou" to their handlers. They were equipped with dried beef and radios, signal mirrors and submachine guns. They landed smack on target, 60 miles from Lhasa, and quickly hooked up with a local resistance leader and several thousand guerrillas. But many of the fighters were surrounded and starving only a few months later. "We kept hoping the CIA would drop us some weapons, but they never came," recalls one survivor. "I went 15 days without food--even shoe leather tasted delicious."

The CIA didn't give up. Beginning in 1958, American operatives trained about 300 Tibetans at Camp Hale in Colorado. The trainees were schooled in spy photography and sabotage, Morse code and mine-laying. Between 1957 and 1960, the CIA dropped more than 400 tons of cargo to the resistance. Yet nine out of 10 guerrillas who fought in Tibet were killed by the Chinese or committed suicide to evade capture, according to an article by aerospace historian William Leary in the Smithsonian's Air & Space Magazine. One veteran guerrilla said the parachute drops were like "throwing meat into a tiger's mouth."

Under the Kennedy administration, the CIA moved the covert program to Mustang, a remote kingdom in Nepal surrounded by China on three sides. The guerrillas ran hit-and-run operations into Tibet. In one of several key raids into Tibet during the early '60s, commandos ambushed a military convoy and made off with a bulging stash of bloodstained documents. Among the captured "work papers" were Beijing's plans to move many more troops into Tibet, and documents that provided the first concrete evidence of the Sino-Soviet rift. "It was one of the single greatest intelligence hauls in history," says Knaus, who recently published a book on Tibet called "Orphans of the Cold War." The Tibetans provided human intelligence and other important "insights into China's... early efforts to develop a nuclear weapons capability," a former U.S. operative told NEWSWEEK.

By the mid-'60s, the Tibet operation was costing Washington $1.7 million a year, according to intelligence documents. That included $500,000 to support 2,100 guerrillas based in Nepal and $180,000 worth of "subsidy to the Dalai Lama." But it was at this time also that Washington became disillusioned with the operation, which had no hope of reversing the Chinese occupation, and scaled back. After the United States cut its support, Beijing pressured Nepal to close the Mustang camps. From his exile in Dharmsala, the Dalai Lama wanted it to end. In July 1974 he sent a 20-minute-long recorded message asking the fighters, now led by a CIA-trained Khampa named Wangdu, to surrender their weapons to local Nepalese authorities. Wangdu and a handful of bodyguards tried to escape and made their last stand against Nepalese soldiers only 20 miles from the Indian border. At nearly 18,000 feet, where the air is thin and a man can see forever, all but one died in a barrage of gunfire.

Wangdu's death marked the end of the CIA-trained guerrilla movement, but Chinese authorities have long memories. They heatedly opposed the Kosovo war, for instance, because they fear future U.S. intervention in their own separatist hot spots. As they fret about Taiwan, Xinjiang and, yes, even Tibet, they can't help but recall the secret war they fought four decades ago over the high Himalayas.

With Tony Clifton in New Delhi and Patricia Roberts and Thomas Laird in Katmandu