ISLAMABAD (Reuters) - A blindfolded man stands on explosives, trembling as he confesses to spying for the CIA in Pakistan. Armed men in black balaclavas slowly back away. Then he is blown up. One of his executioners - members of an elite militant hit squad - zooms a camera in on his severed head and body parts for a video later distributed in street markets as a warning. Al Qaeda, the Taliban and the Haqqani network picked the most ruthless fighters from their ranks in 2009 to form the Khurasan unit, for a special mission. Militant groups dont have the military technology to match the American drone programme intensified in Pakistani tribal areas, but they understand the value of human intelligence, and fear, in the conflict. So the Khurasan were deployed to hunt down and eliminate anyone suspected of helping the Americans or their Pakistani government and military allies. Just this week, an Afghan couple visiting Pakistan was shot dead for spying in North Waziristan. The whole community is scared of the Khurasan, and sometimes we ask each other 'have you seen the videos, said one man, who like everyone else interviewed about the Khurasan, asked to remain anonymous for fear of reprisals. They have people everywhere. How do I know who is an informer for them and who isnt? Made up mostly of Arabs and Uzbeks, the Khurasan, named after a province of an old Islamic empire, are a shadowy group of several hundred men who operate in North Waziristan. CIA pilots, who remotely operate the drones, could step up their pursuit of the Haqqani network leaders after an attack on the US mission in Kabul last month. That would likely prompt the Khurasan to become more ruthless, after capturing about 120 people theyve accused of being spies since 2009. When suspected collaborators are caught, they are held in cells in a network of secret prisons across North Waziristan. A committee of Khurasan clerics decides their fate. Most are declared guilty after what group members admit are very, very harsh interrogations. They are given electric shocks. If they dont help then an electric drill is used or the spies are forced to stand on electric heaters, said one Khurasan operative. Or nails are hammered into their bodies. Any attempt to intervene on behalf of people who are captured is risky. The Khurasan see that as collaboration with the enemy too and it is punishable by death. Whenever someone is found guilty, the Khurasan make sure everyone knows about it. The spies are taken outside residential areas at night and shot dead. Their bodies are thrown on roadsides or squares in the town with a piece of paper warning others to refrain from this 'dirty job of spying, said one operative. Their methods have become so brutal and widespread that the Khurasan have alienated some of the militant leaders who created them, men who would not think twice about ordering beheadings. We tried very hard to reform the Khurasan but repeated attempts to correct them failed, the top Taliban leader in North Waziristan, Hafiz Gul Bahadur, said in a statement. The Khurasan are not dependent on larger militant groups like the Taliban, funding their operations through kidnappings. They are making it more difficult for the Pakistani army to persuade Pashtun tribal communities to form pro-government militias - a cornerstone of its counter-insurgency strategy. On Friday, senior Pakistani military officials complained to members of a North Waziristan pro-government militia that they were failing to improve security and that militants had formed a state within a state there, tribal elders told Reuters. The Khurasan, meanwhile, have gone rogue, challenging other militants who may want to rein them in. No one is above our law, said a Khurasan militant. News of torture and executions carried out by the Khurasan spreads fast in the villages and small towns of North Waziristan. People believe members of the group - who always have their faces covered and wear dark camouflage - are capable of watching their every move. They know each and every thing about the people they pick up. They even have devices on which they record telephone calls of the people they are working on, said a resident of Miranshah, the main town of North Waziristan. They are silent when they carry out operations. They are more sophisticated than the armys commandos. The Khurasan usually dont engage in direct confrontation with the Pakistani army. But a senior military official says thats changing. We face serious problems in areas where the Khurasan operate. We cant leave our compounds and camps because they are on the lookout, said a soldier who requested anonymity. We cant risk an ambush.