We just drove up the KKH and in to China 3 days ago (the first foreign vehicle through the Kunerjab pass/China border since Oct 08!). North of Islamabad we had no problems whatsoever. The town of Besham had a pretty heavy police presence (it has a direct road to the Swat valley), but we didn't stay there and just drove straight through. The further north you go, the more relaxed it seemed to get. We were in a bit of a hurry to just drive up in to China to make our entry date so didn't stop and see much, but north of Gilgit I would say it is currently as safe as it's ever likely to be.
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