In an honest assessment of the situation in the Af-Pak region, Clinton acknowledged that the US policy of creating the'mujahideen' to oust Soviet Union from Afghanistan has also boomeranged.
Clinton also said that Pakistan's policy vis a vis India and Afghanistan is 'changing' for the better but added that she could not vouch for a complete U-turn.
"They [Pakistan] have in the past hedged against both India and an unfriendly regime in Afghanistan by supporting groups that will be their proxies in trying to prevent either India or an unfriendly Afghan Government from undermining their position," she said.
"That is changing... Now, I cannot sit here and tell you that it has changed, but that is changing," she told ABC News in an interview, the transcripts of which was released by the state department.
Clinton accepted that the US had created radical outfits and supported terrorists like Osama bin Laden to fight against the erstwhile Soviet Union, but that backing has boomeranged.
"Part of what we are fighting against right now, the United States created. We created the Mujahidin force against the Soviet Union [in Afghanistan]. We trained them, we equipped them, we funded them, including somebody named Osama bin Laden.
"And it didn't work out so well for us," she said.
The secretary of the state also said Pakistan is paying a "big price" for supporting the US war against terror groups.
"... I think it is important to note that as they have made these adjustments in their own assessment of their national interests, they're paying a big price for it," Clinton said.
"And it's not an easy calculation for them to make. But we are making progress [in Afghanistan]. We have a long way to go and we can't be impatient... Well, the headlines are bad. We're going home. We cannot do that," she said.
Appearing on the same ABC show, secretary of defence Robert Gates said Pakistan has withdrawn an equivalent of about six divisions of its army from the Indian border and moved them to the war zone with the Taliban.
"They're attacking the Taliban, Tehrik-i-Taliban Pakistan, and safe havens that are a problem for us," Gates said.