Musharraf also has tried to deflect speculation that Pakistan harbored terrorist masterminds, saying last week his nation should not be labeled as lax simply because three suspected suicide bombers in the July 7 London attacks were of Pakistani origin and had visited Pakistan in 2004.
In a televised speech, he said Britain should do more to tackle homegrown terrorism.
London blasts: complete coverage
In his latest remarks, Musharraf told journalists in the eastern city of Lahore that Pakistani security forces have overrun al-Qaeda "sanctuaries" in rugged tribal regions along the Afghan border and have captured 700 fighters. "We have shattered and eliminated their command system there," he said. "We attack them when we see them in the mountains."
The al-Qaeda's communications have been reduced to a "courier network," and a message now takes two months to move up or down the organization's hierarchy, he said.
"Is it possible in this situation that an al-Qaeda man sitting here, no matter who he is, may control things in London, Sharm el-Sheik, Istanbul or Africa? This is absolutely wrong," he said.
"I usually wear a suit during my civilian activities, but today I am in my uniform so that the extremists should know that I will continue fighting against them," he said.
However, Musharraf said small groups of al-Qaeda militants might still be hiding in the country's North and South Waziristan tribal regions, where Pakistani security forces have carried out several operations. Military experts believe Osama bin Laden could be in that area.
On Monday, Egyptian police circulated photographs of the six Pakistanis who have been missing since several days before Saturday's attacks at checkpoints in and around the southern city of Sharm el-Sheik. Investigators were looking into whether the men had any involvement in Saturday's attack.
Khalid Ahmed, a counselor at the Pakistani mission in Cairo, said his office had not been informed officially that the missing Pakistanis were suspected of involvement in the deadly bombings. He said many Pakistanis use Egypt as a route to travel to Europe to find jobs.
The recent debate over the possible role of Pakistan-based militants in global terror escalated in part because of reports that one of the alleged attackers in the London bombings spent time at a Muslim religious school, or madrassa, in Pakistan.
Pak madrassas under the scanner
Analysts say a small number of the thousands of madrassas in Pakistan provide spiritual encouragement and other aid to Islamic radicals and have sheltered al-Qaeda fugitives.
Musharraf has launched a crackdown on madrassas, arresting nearly 300 suspected militants and issuing new plans for tighter control of the schools' activities. Similar crackdowns in the past have fizzled out or achieved only partial success, possibly because the government fears heavyhanded tactics will alienate mainstream religious groups.
Musharraf angered Islamic radicals by backing the US-led war on terror that ousted the Taliban militia from power in Afghanistan in 2001 for harboring al-Qaeda. Many people in North and South Waziristan remain sympathetic to the Taliban.
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