Enraged by a string of high-profile attacks on U.S. and NATO troops, Congress gave Clinton a Sunday deadline to deliver a report on whether the Haqqanis should be designated and all of its members subjected to U.S. financial sanctions. Clinton's decision comes amid numerous disagreements within the administration about the wisdom of the designation.
The U.S. already has placed sanctions on many Haqqani leaders and is targeting its members militarily. But it had held back from formally designating the al-Qaida-linked network a terrorist group over concerns it could jeopardize reconciliation efforts between the government and insurgents in Afghanistan, and ruffle feathers with Pakistan, the Haqqanis' longtime benefactor.
Washington long has branded the group among the biggest threats to American and allied forces in Afghanistan, and to that country's stability after American troops leave in 2014. A subsidiary of the Taliban, it is based in northern Pakistan but crosses the border to launch attacks, including a rocket-propelled grenade assault on the U.S. Embassy and NATO compound in Kabul in September.
The Obama administration has been trying to coax Afghanistan's fighting groups into peace talks, offering the prospect of a Qatar-based political office for insurgents and even the transfer of several prisoners being held at the U.S. naval base at Guantanamo Bay, Cuba. Negotiations have been dormant for months, and the Haqqanis have been among the least interested in talking.
A senior Pakistani intelligence official said the administration's decision could hurt U.S.-Pakistani relations and negatively impact the ongoing peace process with the Taliban. The official spoke on condition of anonymity because of the sensitivity of the issue.
The group also has enjoyed a close relationship with Pakistan. The U.S. and its often reluctant counterterrorism ally have been at loggerheads over the Haqqanis for years, with Washington accusing Islamabad of giving the network a free hand in the remote North Waziristan region and even providing it with some logistical support.
Pakistan says that its forces are stretched thin in fighting an insurgency that already has killed more than 30,000 people and that it cannot also take on the Haqqanis. Many analysts attribute the military's reluctance to its historical ties to the Haqqani network's founder, Jalaluddin Haqqani, and an assessment that the group can be an important ally in Afghanistan after U.S. forces withdraw in 2014.
Congress wanted action. In July, it set a deadline to prod the administration into imposing blanket sanctions on the group by designating it a foreign terrorist organization.
Clinton's decision will come into effect in seven to 10 days, U.S. officials said.
They cited disagreements about the designation. Some favored it, while others worried it could elevate the Haqqanis from their current status as an amorphous, tribal movement. That could end up hurting counterterrorism efforts by increasing their appeal among would-be jihadists.
Officials spoke on condition of anonymity because they were not authorized to discuss confidential evaluations.
Last month, the U.S. scored a major counterterror success when an unmanned drone strike in Pakistan near the Afghan border killed one of Jalaluddin Haqqani's sons, Badruddin.
Badruddin was considered a vital part of the Haqqani structure.
The State Department said in May 2011 that Badruddin Haqqani sat on the Miram Shah Shura, a group that controls all Haqqani network activities and coordinates attacks in southeastern Afghanistan. It also blamed him for the 2008 kidnapping of New York Times reporter David Rohde.
Jalaluddin Haqqani created his network while serving as a leader in the decade-long insurgency against the Soviet occupation of Afghanistan, which began in 1979. He developed extensive foreign contacts, getting money, weapons and supplies from Pakistani intelligence, which in turn received billions of dollars from the U.S. and Saudi Arabia.
He served as Afghanistan's justice minister after the Soviets left, and minister of tribal and border affairs after Taliban fundamentalists seized power in 1996. He joined the Taliban insurgency when the U.S. helped overthrow the regime after the Sept. 11, 2001, terrorist attacks.
Haqqani effectively retired in 2005, passing responsibility for day-to-day operations to his son Sirajuddin, who is accused of expanding the network's kidnapping and extortion operations. Reports also accuse the Haqqanis of lucrative drug trafficking and smuggling activity.
The U.S. already has designated Haqqani and his sons individually as terrorists.