Instant View - Osama bin Laden killed in Pakistan, Obama says

(Reuters) - Al Qaeda leader Osama bin Laden was killed on Sunday in a firefight with U.S. forces in Pakistan, ending a years-long hunt for the mastermind of the 2001 attacks on New York and Washington.

U.S. President Barack Obama announced the news in a speech and said bin Laden's body had been recovered following the U.S.-led operation near Islamabad.

KEY POINTS:

- Bin Laden death a major accomplishment for U.S. President Barack Obama and a symbolic blow to al Qaeda.

- Obama said U.S. forces led a targeted operation that killed bin Laden in Abbotabad, north of Islamabad.

- Senior security officials in Pakistan confirmed the news.

- Intelligence that originated last August provided the clues that led to bin Laden's trail, Obama said.

- Bin Laden had been hunted since he eluded U.S. soldiers and Afghan militia forces in an assault on the Tora Bora mountains of Afghanistan close to the Pakistan frontier in 2001.

- The dollar and U.S. stock futures rose on the news, while oil prices fell.

IMPACT ON POLITICS, GEOPOLITCAL ENVIRONMENT:

COMMENTS:

FAWAZ GERGES, PROFESSOR OF INTERNATIONAL RELATIONS, LONDON SCHOOL OF ECONOMICS, LONDON:

"Bin Laden's death is a significant victory for the United States. But it is more symbolic than concrete.

"The world had already moved beyond bin Laden and al Qaeda. Operationally al Qaeda's command and control had been crippled and their top leaders had either been arrested or killed.

"There are no more than 300 members of al Qaeda in Pakistan and Afghanistan, according to Western intelligence.

"More importantly al Qaeda has lost the struggle for hearts and minds in the Arab world and elsewhere and has had trouble attracting followers and skilled recruits.

"Now, the Arab revolutions have dealt a fatal blow to al Qaeda's ideology. The Arab revolutions had exposed al Qaeda's irrelevance to the concrete challenges facing Arab societies.

"It also brings closure. Al Qaeda has really taken hold on the U.S. imagination and bin Laden's death now brings closure for Americans, and it also signals closure for the war on terror which has exacted an enormous toll on the West."

THOMAS HEGGHAMMER, RESEARCH FELLOW, NORWEGIAN DEFENCE RESEARCH ESTABLISHMENT:

"The main effect will be a loss of al Qaeda morale in the long term. It is bad for al Qaeda and the jihadi movements. Bin Laden was a symbol of al Qaeda's longevity and its defiance of the West.

"Now that symbol is gone and his martyrdom is not going to be as powerful a rallying cry, because there are already so many martyrs in the jihadi movements. For example the death of Abu Musab al-Zarqawi in Iraq dealt a blow to his group, al Qaeda in Iraq, and it was not given new impetus by his death.

"So bin Laden's death compounds al Qaeda's decline. But I don't think this affects the Taliban insurgency."

SAJJAN GOHEL, ASIA PACIFIC FOUNDATION:

"Although he (bin Laden) may be dead, trans-national terrorism will not die with him. His ideology and doctrine remains relevant to global jihadists. Al-Qaeda central's influence has been on the decline for the last 5 years.

"It is not a surprise that bin Laden was captured in an urban heartland. Many of al-Qaeda's senior leaders have been captured in Pakistani cities. It had become a myth that the al Qaeda leadership were hiding in caves in the tribal areas.

"Al Qaeda has faced challenges in terms of being operationally confined because of the drone strikes as well being unable to replenish its ranks.

"Al Qaeda's trans-national role has gradually ceded to other emerging terrorist groups like al Qaeda in the Arabian Peninsula and Lashkar e Taiba. It's important to remember that al Qaeda's deputy Ayman al-Zawahri is still at large and his role in articulating the organisation's agenda remains intact.

"The possibility of reprisals also remains a serious reality although it may not happen instantly."

JAMAL KHASHOGGI, SAUDI COMMENTATOR AND INDEPENDENT ANALYST:

"I'm not really surprised that this happened, this was long overdue. I expected this to happed after 9/11. This is a very proud time in the name of history.

"Osama had started off with moderate opposition but then he took a wrong turn along the way. The Arab people today took the right turn. Three months ago I would say that his death would not be so glorified, but it came at the right time. The people at Tahrir square had shutdown the ideas and concepts of bin Laden. This was the right time to end this unfortunate turn, Al Qaeda is not the norm of Arab or Muslim politics.

"This is a relief for Saudi Arabia. There are some elements of al Qaeda in Yemen, but the Yemeni people showed the world that they are a peaceful people, by holding peaceful demonstrations in an effort to oust their president. He was a close friend of mine and I felt sorry for him a long time ago, he gave in to his anger which was his biggest weakness. I guess that's what he wanted and what he expected to happen in the end."

MARTIN INDYK, VICE PRESIDENT AND DIRECTOR OF FOREIGN POLICY, BROOKINGS INSTITUTION, WASHINGTON (INDYK IS A FORMER U.S. ASSISTANT SECRETARY OF STATE FOR NEAR EASTERN AFFAIRS):

Indyk described bin Laden's death as "a body blow" to al Qaeda.

"Their narrative is that violence and terrorism is the way to redeem Arab dignity and rights and what the people in the streets across the Arab world are doing is redeeming their rights and their dignity through peaceful protests, nonviolent protests -- the exact opposite of what al Qaeda and Osama bin Laden has been preaching.

"He hasn't managed to overthrow any government, and they are overthrowing one after the other. I would say that the combination of the two puts al Qaeda in real crisis."

RICK "OZZIE" NELSON, AFGHANISTAN VETERAN AND FELLOW AT THE Centre FOR STRATEGIC AND INTERNATIONAL STUDIES, WASHINGTON:

"This is an incredible moment that has come after a long pursuit, with lots of resources and time invested. It is important to remember that before we project to the future (what this means), it is first and foremost justice delivered.

"It changes little in terms of on-the-ground realities -- by the time of his death, bin Laden was not delivering operational or tactical orders to the numerous al Qaeda affiliates across the world or the rising crop of "inspired" individuals.

"Its ultimate significance will be on a strategic/symbolic level. It's incumbent on the Obama administration to seize on this moment, especially amid the popular uprisings across the Middle East and North Africa. Bin Laden's death will not necessarily ensure the end of al Qaeda, but his death gives the international community an opportunity to end al Qaeda, as it could never be terminated without his death.

"Also, it is important in terms of what it could inspire in retaliation. The U.S. and its allies must be particularly vigilant in the following days, weeks, and perhaps, months as al Qaeda sympathizers and affiliates react to his death.

JOSHUA FOUST, CENTRAL ASIA EXPERT, AMERICAN SECURITY PROJECT:

"I don't think this will change much. Osama bin Laden doesn't have an operational effect on the insurgency in Afghanistan, or on global terrorism. But if Obama is smart, he'll use this to declare a victory of sorts and push for a bigger, faster draw down.

"The real work starts now; if he really was killed in Islamabad, that's a big deal. (The government of Pakistan and the Inter Services Intelligence have) a lot of explaining to do if true."

GOPALAPURAM PARTHASARTHY, FORMER INDIAN HIGH COMMISSIONER TO PAKISTAN, NEW DELHI:

"Are the Pakistanis now going to claim they did not know he was there in their country? Either they are incompetent or comp licit in this.

"This is between the U.S. and Pakistan. (In India) we'll be amused observers of Pakistan's mute protestations."

LEAH FARRALL, AL QAEDA ANALYST (FORMER COUNTER TERRORISM EXPERT WITH THE AUSTRALIAN FEDERAL POLICE), SYDNEY:

"I think it (bin Laden's death) will have more of an impact on the United States and Pakistan and the strategic direction of the war in Afghanistan, rather than al Qaeda.

"There will be tremendous political pressure in the United States...to withdraw from Afghanistan. But with al Qaeda terrorist attacks continuing, nothing really needs to change."

While bin Laden was al Qaeda's head, its second in command Ayman al-Zawahri was in charge of terrorist operations, said Farrall.

"I don't imagine that al Qaeda's violence will stop. If any thing, I think it will continue because its violence, after bin Laden's death, will become even more of a brand," she said.

If bin Laden's death was the result of a joint U.S./Pakistan operation it will ease tensions between Washington and Islamabad, said Farrall.

IMATIAZ GUL, SECURITY ANALYST, PAKISTAN:

"Obviously his (Osama bin Laden) supporters wherever they are, they would try to stage some sort of protest, but I don't really expect any sort of large protests.

"The common Pakistani is so hard-pressed right now because of the other problems and there is only a small portion of support for Osama bin Laden, because of the way this has affected the country in the last 10 years."

"For some time there will be a lot of tension between Washington and Islamabad because bin Laden seems to have been living here close to Islamabad. If the ISI (Inter Services Intelligence) had known then somebody within the ISI must have leaked this information. Pakistan will have to do a lot of damage control because the Americans have been reporting he is in Pakistan and he turns out to be in Islamabad. This is a serious blow to the credibility of Pakistan."

RODOLFO MENDOZA, PRESIDENT, PHILIPPINES INSTITUTE ON PEACE, VIOLENCE AND TERRORISM RESEARCH, PHILIPPINES:

"It's a major tactical victory for the U.S. security community, but I expect that the disruption to al Qaeda terror operations will be temporary. I still don't see the end yet for global Islamist militancy."

"Osama bin Laden is a global symbol of Islamist extremism but there could be other militants lining up to replace him.

"He had established a wide network moving independently but with the same goal in the Middle East, Pakistan, Afghanistan and even in Southeast Asia."

LARRY SABATO, PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF VIRGINIA (COMMENT ON TWITTER):

"This is a giant political plus for Barack Obama."

"Almost 100 percent of Obama's political enemies will cheer him for this one. Imagine the 2012 TV ad."

MARKET REACTION, IMPLICATIONS:

COMMENTS:

RIC SPOONER, MARKET STRATEGIST, CMC MARKETS, SYDNEY:

"There's a danger this could be a bit of a false spike in the market. There's euphoria in Washington but there may well be increased hostility in Pakistan, Afghanistan and parts of the Middle East as a consequence. An inflammation of old wounds.

"We are struggling to see the logic of it. I guess it's based on euphoria, a feeling that it takes away a reason for international tension. But it's difficult to see really the logic behind it being an ongoing rally.

"The whole structure of al Qaeda was very much that they weren't dependent on one person, they put themselves into cells and so forth. That said, he is an important figurehead and there is the potential that financially and with public visibility, they may struggle compared with the past.

"It's always the case in markets that when they are ripe a catalyst can set them off. We've seen a particularly volatile morning, particularly in silver, Against that sort of background news like this is likely to be a catalyst in an already volatile situation."

YASUNARI UENO, CHIEF MARKET ECONOMIST, MIZUHO SECURITIES, TOKYO:

"Market participants are likely to react by buying stocks and selling bonds as the reports (on bin Laden's death) reflect an easing of geopolitical risk.

"But still there could be other attacks by terrorists who are not related to Al Qaeda. This news will have less impact than it would have done a decade ago, however."

ROGER TAN, HEAD OF RESEARCH, SIAS RESEARCH, THE EQUITY ARM OF SECURITIES INVESTORS ASSOCIATION OF SINGAPORE, SINGAPORE:

"Markets may react positively for a very short moment, and then start to fear other leaders may rise.

"This is a risk as other leaders may now try to do more to prove they are better than Osama and can lead the pack."

TETSU AIKAWA, DEPUTY GENERAL MANAGER OF CAPITAL MARKETS, SHINSEI BANK, TOKYO:

"It is reasonable to expect an improvement in U.S. consumer sentiment, but that may not be enough to change the course of the U.S. economy. I don't expect the chance of less U.S. involvement in Afghanistan to lead to an improvement in U.S. public finances.

"This could increase flows into risk assets like yen and dollar carry trades. It's also possible for some European sovereigns spreads to tighten.

"Given the unrest in places like Syria and Yemen, there is still a chance of democracy spreading like dominoes through the Middle East and North Africa. In the short term this might be a cause of worry, but this is something that markets would welcome in the long term."

CHIP HANLON, PRESIDENT, DELTA GLOBAL ADVISORS, HUNTINGTON BEACH, CALIFORNIA:

"I'm not sure there will be much of a market reaction. He is a figurehead and there is a feel good value in knowing he is gone. But most people think (al Qaeda deputy Ayman) al-Zawahri has been running it for a while now.

"There some feel good value and market will like that. There will be a boost for the appropriate politicians, primarily the commander in chief. It doesn't change much about the energy situation and doesn't change much about the ongoing battle with radical Islamists.

"It's sort of like the news when we heard Saddam was caught, in the end it didn't change much fundamentally and I don't think this will either."

KEN HASEGAWA, COMMODITY DERIVATIVES SALES MANAGER, NEWEDGE, TOKYO:

"Absent other news, the death sparked selling in oil and gold, and buying in stocks. But it has only had a passing impact and the markets will eventually return to normal.

"It's not that bin-Laden suspended the crude oil production, although he had some influence as a whole. But it does not mean that all the terrorism acts will be gone because of this."

MOHAMED EL-ERIAN, CHIEF EXECUTIVE OFFICER AND CO-CHIEF INVESTMENT OFFICER, PIMCO:

"In reflecting the news on Bin Laden, markets will balance the durable impact of a reduction in a security risk with the possibility of isolated disturbances in some parts of the Middle East and central Asia."

"By lowering national security risks overall, this is likely to bolster equity markets and lower U.S. Treasury prices in a reverse flight to quality movement."

"Oil markets are likely to be the most volatile given their higher sensitivity to the tug of war between lower risk overall and the possibility of isolated disturbances in some parts of the Middle East and central Asia."

PETER KENNY, MANAGING DIRECTOR, KNIGHT CAPITAL GROUP JERSEY CITY, NEW JERSEY:

"Geopolitically this will have an enormous impact on unrest in the Middle East. It won't be purely positive for markets because it could lead to further instability in the Middle East.

"It certainly will help the flagging fortunes of the current president of the United States. Generally speaking markets will have a very positive view of this and it will be well deserved.

"(U.S.) markets have evolved beyond Osama bin Laden to the extent that they have reverted back to traditional metrics of risk and it's all about earnings."

DAVID LENNOX, COMMODITIES AND MINING ANALYST, FAT PROPHETS, SYDNEY:

"There is always a reaction in commodities to news of this nature. The markets will always react quickly, and in this case it is someone who has been held out as the father of all terrorism.

"But any easing we might see in oil or gold markets, in my view will be short-lived. The longer-term impact will not be substantial."

JONATHAN BARRATT, MANAGING DIRECTOR, COMMODITY BROKING SERVICES, SYDNEY:

"It is all about erosion of risk premium. If Osama is taken out, you are going to see risk premium being wiped out from the market. It is going to bring down oil prices by $5 to $10 if people warrant that risk premium is important."

TOMOMICHI AKUTA, SENIOR ECONOMIST, MISTUBISHI UFJ RESEARCH AND CONSULTING, TOKYO: on oil markets

"This is a bear factor. I take this as a factor that would ease worries about geopolitical risks."