Donors in Saudi Arabia and the United Arab Emirates have been financing extremist South Asian madrassas to the tune of $100 million a year, according to a leaked U.S. diplomatic cable released to Pakistani daily Dawn. Notably, the Miami Herald reports that Gulf funding in South Pakistan has increased extremism in areas that were once considered moderate.

"Local economic conditions coupled with foreign financing appear to be transforming a traditionally moderate area of the country into a fertile recruiting ground for terrorist organizations," said Bryan Hunt, a key officer at the U.S. Consulate in Lahore and author of the cable. The document also notes that the funds were provided "ostensibly with the direct support" of the Saudi and Emirati governments.

The cable confirms previous allegations made by U.S. lawmakers and senior American officials about Saudi financial support for South Asian extremism. Funds have also ended up in the hands of Deobandi clerics, who "preach the same strain of hard-line Islam that inspires Taliban militants in Afghanistan," according to the cable. Islamists recruit young boys, often aged 8 to 12, to fight Pakistan's government and the West, all on the tab of Saudi charities and fundraisers.

The U.S. Consulate in Lahore "believes that this growing recruitment network poses a direct threat to (U.S. government) counterterrorism and counter-extremism efforts in Pakistan," the cable also said. "The Pakistani provincial and federal governments, while fully aware of the problem, appear to fear direct confrontation with these extremist groups."

Saudi and Emirati officials did not have any comment at the time of the publication.