PESHAWAR, Pakistan - Militants torched 160 vehicles, including dozens of Humvees destined for U.S. and allied forces fighting in Afghanistan, in the boldest attack so far on the critical military supply line through Pakistan.

The American military said yesterday's raid on two transport terminals near the beleaguered Pakistani city of Peshawar would have "minimal" impact on anti-Taliban operations set to expand with the arrival of thousands more troops next year.

However, the attack feeds concern that insurgents are trying to choke the route through the famed Khyber Pass, which carries up to 70 percent of the supplies for Western forces in landlocked Afghanistan, and drive up the cost of the war.

The owner of one of the terminals hit yesterday denied government claims that security was boosted after an ambush last month in which bearded militants made off with a Humvee and later paraded it in triumph before journalists.

"We don't feel safe here at all," Kifayatullah Khan said. He predicted that most of his night watchmen would quit their jobs out of fear. "It is almost impossible for us to continue with this business."

The attack reduced a section of the walled Portward Logistic Terminal to a smoldering junkyard.

Khan said that armed men flattened the gate before dawn with a rocket-propelled grenade, fatally shot a guard, and set fire to 106 vehicles, including about 70 Humvees.

Humvees are thought to cost about $100,000 each, though the price varies widely depending on armor and other equipment, meaning yesterday's losses may exceed $10 million.

A reporter who visited the depot saw six rows of destroyed Humvees and military trucks packed close together, some on flatbed trailers, all of them gutted and twisted by the flames.

The attackers fled after a brief exchange of fire with police, who arrived about 40 minutes later, he said.

Nine other guards who stood helplessly aside during the attack put the number of assailants at 300, Khan said. Police official Kashif Alam said there were only 30.

The U.S. military in Afghanistan said in a statement that an unspecified number of its containers were destroyed but that their loss would have "minimal effect on our operations."

McCain: Tougher Afghanistan Fight

Sen. John McCain

said yesterday that the situation in Afghanistan will get more difficult before it gets easier as the United States prepares to send in thousands more troops.

The former GOP candidate,

who is to report back to President-elect Barack Obama, visited the southern province of Helmand, where he said NATO forces are at a stalemate with insurgents.

Though Helmand

has for years been the responsibility of British forces, McCain said the United States would focus more on it.

McCain said it was clear

there has been progress in the eastern part of Afghanistan, the region where most U.S. forces are stationed.

- Associated Press