Very nice excuse-making on the ambassador's part, but really, does he expect Americans to believe this official government story? Bin Laden was the most wanted man in the world, he wasn't a Mafioso from Brooklyn. Doesn't this incident mean we can finally say out loud what is true, that Pakistan is an enemy of the U.S., and then we can proceed to deal with them based on this fact?
I'll deal with this last question first: No, we cannot say out loud that Pakistan is our enemy, because it isn't our enemy. There are forces within the fractious Pakistani governing structure that are pro-Taliban, and even some, one assumes, that are actively, or at least passively, pro-al Qaeda. But Pakistan is also fighting al Qaeda and the Taliban in many parts of the country's tribal areas, and Pakistani soldiers are losing their lives in this fight. And are we really going to call Pakistan an enemy? What do you do after you make that declaration? Go to war with a nuclear-armed country of almost 200 million people?
Even if it were true that Pakistan is our enemy, we have no means to deal with it as an enemy. My thought has always been to try to bring Pakistan closer to us; to help its economy, its health care and education system (whose collapse helped lead to the rise of the madrasa system in the first place). I'm not Pollyannish about this, but it's the only thing that will mitigate Pakistan's ability to do real damage to us. I also know what happens when we abandon Pakistan, as we did in the early '90s: You wind up with madrasas and resentment and radicalism and all sorts of other unhappy things.
On the first part, whether or not Pakistani officials knew of Bin Laden's location: Obviously, the ambassador's assertions could be read merely as spin. But I think there is something to what he is suggesting. To be sure, Bin Laden's hideout, in a city that is home to Pakistan's equivalent of West Point, as well as to three army regiments, raises all sorts of questions, questions Steve Coll exhaustively parsed in a post a couple of hours ago:
The initial circumstantial evidence suggests... that bin Laden was effectively being housed under Pakistani state control. Pakistan will deny this, it seems safe to predict, and perhaps no convincing evidence will ever surface to prove the case. If I were a prosecutor at the United States Department of Justice, however, I would be tempted to call a grand jury. Who owned the land on which the house was constructed? How was the land acquired, and from whom? Who designed the house, which seems to have been purpose-built to secure bin Laden? Who was the general contractor? Who installed the security systems? Who worked there? Are there witnesses who will now testify as to who visited the house, how often, and for what purpose?
Excellent questions, and the Pakistanis, I hope, have excellent answers in response. But knowing Pakistan as I do (not as well as Steve does, to be sure, but I still have a bit of experience there), it is completely plausible to me that Bin Laden was hiding in plain sight, really, actually hiding, without the knowledge of, among others, senior military officials in Abbottabad. Those who assume that certain elements with the Pakistani government knew where he was are assuming that those elements communicated with the actual power centers of Pakistani governance; they assume that Bin Laden ever showed his face in Abbottabad; and they assume the existence of a culture of inquiry and curiosity that doesn't necessarily exist in Pakistan (nosiness in Pakistan only gets you into trouble).
Yes, it makes a certain amount of sense for the Pakistani intelligence apparatus to hide Bin Laden in a city in which he could closely observed, but the converse is also true: Why would the ISI, which is a fairly clever organization, stash him in a place, that, should he be discovered there, would raise the sort of questions now being raised? There are middle-ground places in Pakistan one could hide a Bin Laden that would give you some measure of deniability.
In any case -- and this is the most relevant point -- I doubt the civilian leadership of the country (the leaders Husain Haqqani represents) had any knowledge at all of Bin Laden's location. This is not information the army or the ISI would share.