Pakistan PM: No more "business as usual" with U.S. (Reuters)

ISLAMABAD (Reuters) – Pakistan's Prime Minister Yusuf Raza Gilani ruled out "business as usual" with the United States on Monday after a NATO attack killed 24 Pakistani soldiers, and the army threatened to curtail cooperation with Washington on Afghanistan drastically.

Saturday's incident on Pakistan's border with Afghanistan has complicated U.S. attempts to ease a crisis in relations with Islamabad and stabilize the region before foreign combat troops leave Afghanistan.

"Business as usual will not be there," Gilani told CNN when asked if the relationship with the United States would continue. "We have to have something bigger so as to satisfy my nation."

Gilani's comments reflect the fury of the Pakistani government and military, and the pressure they are under from their own people. "You cannot win any war without the support of the masses," he said. "We need the people with us."

The relationship, he said, would continue only if based on "mutual respect and mutual interest." Asked if Pakistan was receiving that respect, Gilani replied: "At the moment, not."

Gilani's comments cap a day of growing pressure from the Pakistani military, which threatened to reduce cooperation on peace efforts in Afghanistan.

"This could have serious consequences in the level and extent of our cooperation," military spokesman Major General Athar Abbas told Reuters.

Pakistan has a long history of ties to militant groups in Afghanistan so it is uniquely positioned to help bring about a peace settlement, a top foreign policy and security goal for the Obama administration.

Washington believes Islamabad can play a critical role in efforts to pacify Afghanistan before all NATO combat troops pull out in 2014, and cannot afford to alienate its ally.

Pakistan shut down NATO supply routes into Afghanistan in retaliation for the weekend shooting incident, the worst of its kind since Islamabad allied itself with Washington in 2001.

"We have been here before. But this time it's much more serious," said Farzana Sheikh, associate fellow of the Asia program at Chatham House in London.

"The government has taken a very stern view. It's not quite clear at this stage what more Pakistani authorities can do, apart from suspending supplies to NATO forces in Afghanistan."

Adding a new element to tensions, and a diplomatic boost for Islamabad, Pakistan's ally China said it was "deeply shocked" by the incident and expressed "strong concern for the victims and profound condolences for Pakistan.

Russia, which has been seeking warmer relations with Pakistan as worry grows over the NATO troop pullout in Afghanistan, said it was "unacceptable" to violate the sovereignty of states even when hunting "terrorists."

On Saturday, NATO helicopters and fighter jets attacked two military outposts in northwest Pakistan, killing the 24 soldiers and wounding 13 others, the army said.

"TRAGIC, UNINTENDED"

NATO described the killings as a "tragic, unintended incident" and said an investigation was underway. A Western official and an Afghan security official who requested anonymity said NATO troops were responding to fire from across the border.

Pakistan's military denied NATO forces had come under fire before launching the attack, saying the strike was unprovoked and reserving the right to retaliate.

Abbas said the attack lasted two hours despite warnings from Pakistani border posts. "They were contacted through the local hotline and also there had been contacts through the director-general of military operations. But despite that, this continued," he said.

After a string of deadly incidents in the largely lawless and confusing border region, NATO and Pakistan set up the hotline that should allow them to communicate in case of confusion over targets and avoid "friendly fire."

Both the Western and Pakistani explanations are possibly correct: that a retaliatory attack by NATO troops took a tragic, mistaken turn in harsh terrain where differentiating friend from foe can be difficult.

An Afghan Taliban commander, Mullah Samiullah Rahmani, said the group had not been engaged in any fighting with NATO or Afghan forces in the area when the incident took place. But he added that Taliban fighters control several Afghan villages near the border with Pakistan.

A similar cross-border incident on September 30, 2010, which killed two Pakistani service personnel, led to the closure of one of NATO's supply routes through Pakistan for 10 days.

The attack was the latest perceived provocation by the United States, which infuriated and embarrassed Pakistan's powerful military in May with a unilateral special forces raid that killed al Qaeda leader Osama bin Laden.

OBAMA EFFIGY BURNED

The main Pakistani association that delivers fuel to NATO forces in Afghanistan said it would not resume supplies soon in protest against the NATO strike.

In the Mohmand region, where the attack took place, hundreds of angry tribesmen yelled "Death to America." About 200 lawyers protested in Peshawar city, some burning an effigy of U.S. President Barack Obama.

Newspaper editorials were strident. "We have to send a clear and unequivocal message to NATO and America that our patience has run out. If even a single bullet of foreign forces crosses into our border, then two fires will be shot in retaliation," said the mass-circulation Urdu language Jang newspaper.

The NATO strike has shifted attention away from what critics say is Pakistan's failure to go after militants.

Pakistan joined the U.S. global war on militancy launched after al Qaeda's September 11, 2001, attacks on the United States, and won billions of dollars in aid in return.

But the unstable, nuclear-armed country has often been described as an unreliable ally, and the United States has resorted to controversial drone aircraft strikes against militants on Pakistani territory to pursue its aims.

U.S. frustrations grew so much that Obama ordered the raid that killed bin Laden in Pakistan be kept secret, knowing it could make the United States even more unpopular in Pakistan.

(Additional reporting by Zeeshan Haider and Rebecca Conway in ISLAMABAD, Izaz Mohmand, Jibran Ahmad and Faris Ali in PESHAWAR, and William Maclean in LONDON; Writing by Michael Georgy; Editing by David Stamp)

Decade after 9/11, Afghans languish in Pakistan (Reuters)

HARIPUR/ISLAMABAD, Pakistan (Reuters) – When Ghulum Nabi's father heard U.S.-backed troops toppled Afghanistan's Taliban after the September 11, 2001, attacks, he rushed to their family home in an Afghan refugee camp in Pakistan to spread the news.

Perhaps, one day they could all return to a peaceful and prosperous Afghanistan supported by a Western superpower.

After 10 years of U.S.-led efforts to pacify one of the world's most turbulent countries, Afghan refugees in Pakistan have little hope for stability in their homeland.

"I grew up here and Pakistan is my country. When my father pushes me to go back to visit, I end up having a fight with him. I'm never going to live there. I want to get Pakistani nationality. This is my home," said Nabi, 22, who runs a crockery shop.

"It doesn't matter if it is America or anyone else trying to watch over Afghanistan. I will still be looking around to see if anyone is pointing a gun at me."

Afghan President Hamid Karzai would welcome a return of the millions of Afghans living in Pakistan.

It would be a vote of confidence in his administration, which faces many problems, from widespread allegations of state corruption, to a resilient Taliban.

SOVIET INVASION TRIGGERED LIFE OF UNCERTAINTY

Many of the refugees are skilled labourers who could boost reconstruction and help revive a weak economy if they return. But it's unlikely to happen.

Most of the refugees in Pakistan arrived after the Soviet invasion of Afghanistan in 1979. The conflict that followed consumed their homeland. After the mujahideen warriors defeated the Russians, warlords turned on each other and tore Afghanistan apart.

Many refugees fear a repeat of that chaos as a U.S. troop withdrawal looms.

Some would like to go home but feel they can't. Others regard Pakistan as home despite its many disadvantages. Without proper Pakistani identification cards, Afghans can't open bank accounts or buy or lease property.

Many are openly mistreated by Pakistanis who have little fear of being held to account.

On August 14, the anniversary of Pakistan's independence, Saeed Anwar's landlord showed up with three men armed with AK-47 assault rifles at his clothing shop at a busy bazaar in the city of Haripur, home to 80,000 Afghan refugees who live in camps.

"They threw around my merchandise and said I need to pay them a 300,000 Pakistani rupees ($3,450) advance on the rent. I had already paid the rent," said Anwar, wearing traditional, loose Pakistani trousers.

"I went to the police to register a case. But when they see a dispute between a Pakistani and an Afghan, they automatically assume the Afghan has done something wrong."

Still, many Afghans believe its wiser, and safer, to just accept the frequent humiliation than return to a homeland still shattered, despite a long U.S.-led military campaign against militancy and billions of dollars in Western aid.

Afghans -- from elders who vividly remember the first Soviet gunship helicopters in Afghanistan, to teenagers who have only visited a few times -- work for Pakistanis as welders or carpenters and tailors in Haripur and other cities.

Most of them prefer to run their own small businesses, from food carts to car dealerships. It's the only sense of independence they have in the camps which consist of small cement and mud housing units near a reservoir.

The elders have set up a jirga, or tribal gathering, to settle internal disputes, as is done in much of Afghanistan. Cricket games are the only form of entertainment and leisure activity for most youths.

Two years ago Pakistan agreed to let displaced Afghans stay until the end of 2012, after a resurgence of militant violence along the Pakistan-Afghanistan border hindered repatriation.

Still, people like Sherullah, whose nine children were born in Pakistan, feel vulnerable. What if Pakistan asks them to leave one day?

"There is a lot of confusion. If there's one thing I want, it's for this confusion to go away, for us to know if we will be staying or not," said Sherullah, who was cutting women's clothing in his tailor shop.

"There are many people living here that can afford to build a proper house but don't want to. They think 'what if next year we are told to leave?'. So they continue to live in mud houses."

Aside from 1.7 million officially registered Afghans in Pakistan, there are an additional 800,000 with no documentation.

According to the United Nations, Pakistan is home to the world's largest refugee population, mostly Afghans, who strain the country's troubled economy.

Pakistan would like to repatriate them.

There are, however, few incentives for refugees to head back to Afghanistan. So life in camps may drag on for many years.

Even though the U.S. disengagement is gradual, it brings back painful memories of what was widely seen as American abandonment of Afghanistan after the Soviet exit in 1989.

Warlords soon took over and bloodshed returned.

Haji Aslam, 65, an elder in one of the camps, has seen conflict in Afghanistan over the last 30 years -- from the battlefields where he fought the Soviets to what he sees today on his television screen.

He is betting on the Taliban to prevail once the Americans leave.

"Even if just 10 Taliban show up, the Afghan government will flee Kabul," said Aslam, a man with a white beard wearing a traditional flat Afghan cap.

"In Pakistan, I am at peace. I know my children are safe."

(Editing by Michael Georgy and Robert Birsel)

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American man kidnapped by assailants in Pakistan (Reuters)

LAHORE, Pakistan (Reuters) – Several assailants broke into a house in Pakistan's eastern city of Lahore in the pre-dawn hours Saturday, overcame security guards and kidnapped a U.S. man identified as an international development expert, police said.

In Washington, a U.S. State Department spokeswoman identified the man as Warren Weinstein.

Weinstein has been identified as working for J.E. Austin & Associates, an Arlington, Virginia-based consulting firm, on a development project in lawless tribal areas where Pakistani troops have been battling Islamist insurgents for years.

"Six to eight people broke into his house at around 3:30 a.m., when security guards on duty were making preparation for fasting," police official Tajamal Hussain told Reuters, referring to the Ramadan fast observed by Muslims.

"Two of the assailants came from the front gate while about six others used the back door. They tortured the guards and then took the American with them."

A security official familiar with the incident said the gunmen forced the man's driver to knock on his bedroom door. When the man opened it, they took him.

Hussain said the victim, in his 60s, had been living in Pakistan for five to six years. He mostly lived in Islamabad but had been traveling to Lahore.

The security official said there had been no claim of responsibility.

The State Department spokeswoman, Joann Moore, said, "We are working with local authorities on the investigation." Moore added that members of Weinstein's family were receiving support from the U.S. consulate in Lahore.

WELL-KNOWN IN DEVELOPMENT CIRCLES

A biography of Weinstein on his consulting firm's website said he has a doctorate in international law and economics, is a Fulbright Scholar with 25 years of experience in international development projects and is well known among donor agencies, development banks and private sector groups working with emerging economies. The Fulbright Program is run by the U.S. State Department.

"Currently, Dr. Weinstein is serving as Chief of party for JAA (J.E. Austin Associates) on the Pakistan Initiative for Strategic Development and Competitiveness," the firm's website said.

Later Saturday, Weinstein's biography was removed from the website.

A representative of J.E. Austin could not be immediately reached for comment at the firm's office in Arlington.

The firm is handling the development initiative as a contractor for the U.S. Agency for International Development, the main foreign aid arm of the U.S. government, according to a USAID report on the project.

Anti-U.S. sentiment runs high in Pakistan. Prickly ties between Islamabad and Washington hit a low point after the May 2 killing of al Qaeda chief Osama bin Laden in an attack that Pakistan termed a breach of its sovereignty.

Kidnapping for ransom is relatively common in Pakistan, although foreigners are not often targets. Militants also occasionally take foreigners hostage.

Pakistani Taliban, linked to al Qaeda, have claimed responsibility for kidnapping a Swiss couple in July in the volatile southwestern province of Baluchistan.

They said the couple could be freed in exchange for a Pakistani woman serving a jail term in the United States for shooting FBI agents and U.S. soldiers in Afghanistan.

Eight Pakistani employees of a U.S.-based aid organization, American Refugee Committee (ARC), were kidnapped in Baluchistan last month.

(Reporting by Chris Allbritton, Mubasher Bukhari and Augustine Anthony, and David Lawder in Washington; editing by Will Dunham and Mohammad Zargham)

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Pakistan looms large as Clinton flies to India (Reuters)

ATHENS (Reuters) – Secretary of State Hillary Clinton hopes to cement gains in ties with emerging global power India when she flies to New Delhi on Monday ties while heading off new frictions with fragile U.S. ally Pakistan.

Clinton's two-day trip to India, her second as secretary of state, follows President Barack Obama's visit last November and underscores Washington's growing bonds with the world's second most populous country and its $1.6 trillion economy.

Clinton will meet Indian leaders for a U.S.-India "strategic dialogue" session, regular meetings designed to get officials from both sides working more closely together, and comes nearly a week after deadly triple bomb attack on India's financial hub of Mumbai.

She will then move on to Chennai, the eastern port city which has become a hub for U.S. trade and investment, including a major auto engine plant for Ford Motor Co..

U.S. officials say Clinton's trip will demonstrate the breadth of cooperation -- which ranges from expanding military and intelligence work to educational exchanges and nuclear and other hi-tech energy projects.

But the pending U.S. drawdown of forces in Afghanistan and Indian relations with traditional rival Pakistan will both be in focus as Indian security fears grow following Wednesday's attacks on Mumbai.

U.S. officials and political analysts say that Clinton will urge India to stay the course and not raise tension, concerned that any overreaction by New Delhi could upset an already fragile U.S. relationship with Islamabad.

"She will encourage India to do all it can to engage Pakistan, to find areas where they might be able to break down some of their barriers and build some kind of confidence in each other," said Karl Inderfurth, a former senior State Department official under the Clinton administration and now at the Center for Strategic and International Studies.

It will not be an easy sell -- although analysts say India itself is increasingly worried over the stability of its neighbor and has its own reasons for moving cautiously.

No one has claimed responsibility for last week's Mumbai blasts, the worst such attack since Pakistan-based militants struck India's financial hub in 2008, killing 166 people and raising tensions with Islamabad.

Indian police have questioned members of a home-grown militant group, taking some of the immediate heat off Pakistan.

But both New Delhi and Washington suspect that elements of the Pakistani establishment may not be fully onboard with the U.S.-led fight against Islamic militants, doubts underscored in May when U.S. forces killed al Qaeda leader Osama bin Laden in a compound not far from Islamabad without telling the government in advance.

"The Indians see the United States as finally waking up to the problem of Pakistan, and they will not want to interject themselves into that process," said Ashley Tellis, an India expert at the Carnegie Endowment for International Peace.

LOOKING AHEAD

Clinton will update Indian Prime Minister Manmohan Singh and other officials on Pakistan, as well as on U.S. plans to draw down about a third of the 100,000 U.S. forces from Afghanistan during the next year.

Indian officials are concerned an overly hasty U.S. departure could benefit the Taliban and by extension Pakistan, and Clinton will outline how Washington plans to both stay engaged amid growing talk of a political settlement.

Despite shared concerns, which include China's growing assertiveness and traditional friendship with Pakistan, Clinton will spend much of her time highlighting U.S.-India economic ties -- a relationship both sides say holds great promise, but has yet to fulfill its potential.

The United States was disappointed when India rejected U.S. bids for an $11 billion fighter aircraft contract in April, but still hopes to profit from New Delhi's ongoing military shopping spree such as a $4.1 billion purchase of Boeing C-17 military transport planes in June.

U.S. firms want to take a slice of India's $150 billion nuclear energy market but have lagged state-backed rivals from Russia and France.

U.S. power giants such as General Electric are hoping to get a foothold after a landmark 2008 nuclear cooperation accord, although progress has been slow.

Washington has been pushing India to water down a law passed in 2010, which would force all private nuclear reactor builders to take on uncapped compensation in the event of a nuclear disaster and is considered tougher than in other nuclear power-producing countries.

And U.S. hopes for Indian moves to open up potentially lucrative sectors such as insurance and large-scale "big box" retail have been repeatedly set back, while outsourcing of U.S. jobs to cheaper Indian workers has also been a concern.

(Editing by Paul de Bendern and Nick Macfie)

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In Pakistan, many say aid 'snub' dims US sway (AP)

ISLAMABAD – The decision to suspend more than one-third of American military aid to Pakistan could end up hurting Washington more than Islamabad as the U.S. seeks to navigate an end to the Afghan war and defeat al-Qaida, former Pakistani officials and analysts warned Monday.

Holding back the $800 million in aid is unlikely to pressure Pakistan to increase cooperation with the U.S. and could strengthen those in the government who argue that Washington is a fickle ally who can't be trusted, they said.

"If you still need the relationship, which clearly the United States does, then it really doesn't make sense to take action at this time because it leaves the United States with less, not more, influence with the Pakistani military," said Maleeha Lodhi, a former Pakistani ambassador to the U.S. "Cooperation cannot be coerced by punitive actions."

Despite billions of dollars in American aid since the attacks on Sept. 11, 2001, the relationship has long been tense because of Pakistan's reluctance to target Taliban militants on its territory who stage cross-border attacks against NATO troops in Afghanistan.

The relationship took a nose dive on May 2 when U.S. commandos staged a covert raid to kill al-Qaida chief Osama bin Laden in a Pakistani garrison town not far from Islamabad. The raid humiliated the Pakistani military, which ordered U.S. trainers out of the country and reduced bilateral cooperation.

The lack of trainers means that planned U.S. equipment cannot be put into service, which reduces some of the needed aid. Also, about $300 million from the trimmed aid was intended to reimburse Pakistan for the cost of deploying troops along the Afghan border.

But U.S. officials claim that Pakistan has not lived up to pledges to uproot and disrupt Taliban militants and suspected al-Qaida factions in the border region.

President Barack Obama's chief of staff, William Daley, said Sunday that the U.S. was suspending $800 million in aid to the Pakistani military until the two countries can patch up their relationship.

But Tariq Fatemi, another former Pakistani ambassador to the U.S., said he thought the American strategy to pressure Pakistan was destined for failure.

"I think it is unwise to expect the Pakistanis to buckle under what is a publicly delivered snub," said Fatemi. "It will strengthen those elements in the armed forces that have always had grave misgivings of the relationship with the United States."

It also stoked anger among ordinary Pakistanis.

"Our country threw the whole country into the inferno of the war on terror and made poverty our destiny, but it could not appease the Americans," said Mohammad Nauman, a 41-year-old information technology specialist in the southern port of Karachi.

Many Pakistanis have never forgiven the U.S. for slapping sanctions on the country in 1990 because of its work to develop a nuclear weapon. The decision came only a year after Pakistan and the U.S. were successful in a decade-long quest to drive the Soviets out of Afghanistan.

The sanctions left many Pakistanis with a sense that the U.S. was only interested in a "transactional" relationship that it could abandon once its interests were served.

Fatemi, the former ambassador, said the U.S. decision appeared to undercut claims by Obama administration officials that the U.S. was interested in a long-term relationship that encompassed much more than counterterrorism cooperation.

Pakistan army spokesman Maj. Gen. Abbas said Sunday that the military had received no official notice from the U.S. that aid was being suspended. He also said that the loss of aid would have no effect on military operations against Islamist militants in the country because they were being conducted with Pakistan's own resources.

"I think it hurts Washington more than it hurts Islamabad," said Lodhi, the former ambassador. "Assistance is influence, and when you withhold it or suspend it, you deprive yourself of influence."

Pakistan army chief Gen. Ashfaq Parvez Kayani seemed to pre-empt the effect of the aid cut in a speech after the bin Laden raid — saying all U.S. military assistance now should be diverted to improve the country's economy and help common Pakistanis.

"They want to end any impression that they are some kind of hired help," said Lodhi.

Some analysts have predicted that the suspension of military aid could hurt the military's war against the Pakistani Taliban over the long run, especially since the country is suffering an economic slump.

But Ayesha Siddiqa, a Pakistani defense analyst, said that Pakistan's close relationship with China could offset the impact. Pakistan has long purchased military equipment and missiles from China at lower-cost rates and bought fighter aircraft from the country last year, she said.

The Pakistani military is "trying to go the Chinese way," said Siddiqa.

It is unclear what other actions Pakistan will take in response to the suspension of U.S. military aid. It could be less helpful in targeting al-Qaida fighters within the country and in pushing Afghan Taliban militants with whom it has historical ties to negotiate an end to the Afghan war.

Pakistan is also believed to secretly support U.S. drone strikes against militants in the country's mountainous tribal region. That support has been shaken in the wake of the bin Laden raid and could be further imperiled by the suspension of aid.

One of the most high-profile points of leverage that the Pakistanis have with the U.S. is the shipment of a large percentage of non-lethal supplies through the country to NATO troops in Afghanistan. Pakistan temporarily closed the border to NATO supplies last year after an accidental U.S. helicopter strike killed two Pakistani troops. It is unclear if the suspension of aid could provoke a similar response.

"When you take this kind of action, you reinforce the transactional nature of the relationship," said Lodhi. "The moment you do that all bets are off because the response will not be a very positive one."

But Lodhi also noted that Pakistan and the U.S. do share common interests in combatting terrorism and fostering a stable Afghanistan — even if the details don't always match up.

"The common interest is there, but the question is can we walk back from the brink and find common ground to rebuild trust step by step?"

___

Associated Press writers Kathy Gannon in Islamabad and Ashraf Khan in Karachi, Pakistan, contributed to this report.

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White House: US suspending $800M in Pakistan aid (AP)

WASHINGTON – President Barack Obama has ordered the suspension of $800 million in aid to the Pakistani military, his chief of staff said Sunday, as part of what experts say is a tougher line with a critical U.S. partner in the fight against terrorism.

Top aide William Daley described the U.S. relationship with Pakistan as "difficult" and said it must be made "to work over time." But he added that until "we get through that difficulty, we'll hold back some of the money that the American taxpayers are committed to give" Pakistan.

The suspension of U.S. aid, first reported by the New York Times, followed a statement last week by Adm. Mike Mullen, chairman of the U.S. Joint Chiefs of Staff, that Pakistan's security services may have sanctioned the killing of a Pakistani journalist who wrote about infiltration of the military by extremists.

The allegation was rejected by Pakistan's powerful military establishment, including the Inter-Services Intelligence Agency, which has historic ties to the Taliban and other militant groups and which many Western analysts regard as a state-within-a-state.

Daley, interviewed on ABC's "This Week," suggested the decision to suspend military aid resulted from the increasing estrangement between the U.S. and Pakistan, especially since the U.S. raid in May that killed al-Qaida leader Osama bin Laden not far from Pakistan's equivalent of the U.S. Military Academy at West Point.

"Obviously there's still a lot of pain that the political system in Pakistan is feeling by virtue of the raid that we did to get Osama bin Laden," Daley said.

A senior U.S. official said the suspension was triggered by the Pakistani army's decision to significantly reduce the number of visas for U.S. military trainers. "We remain committed to helping Pakistan build its capabilities, but we have communicated to Pakistani officials on numerous occasions that we require certain support in order to provide certain assistance," said the official, who was not authorized to discuss the issue publicly and spoke only on condition of anonymity.

Secretary of State Hillary Clinton recently told senators that "when it comes to our military aid, we are not prepared to continue providing that at the pace we were providing it unless we see certain steps taken."

Pakistan army spokesman Maj. Gen. Athar Abbas declined comment on the suspension. He pointed to comments by Army Chief Ashfaq Parvez Kayani, who last month said U.S. military aid should be diverted to civilian projects.

Hasan-Askari Rizvi, a Pakistani political and defense analyst, said the U.S. decision to suspend aid is an attempt to increase pressure on Pakistan, but he believes it could hurt both sides.

"The Pakistani military has been the major supporter of the U.S. in the region because it needed weapons and money," said Rizvi. "Now, when the U.S. builds pressure on the military, it will lose that support."

George Perkovich, an expert on Pakistan with the Carnegie Endowment for International Peace in Washington, called the suspension "overdue."

"We've been trying for years to get, persuade, push the Pakistani army to conduct military operations on their border with Afghanistan, especially in North Waziristan, and they've said it's not in their interest, that they're overstretched already," Perkovich said in a telephone interview from Paris. "I think it's smart to say, `We hear you.'"

Perkovich said if U.S. financial aid didn't change the behavior of the Pakistan military, then withdrawing it probably wouldn't either. But he said the termination of the $800 million in assistance could lead to a re-examination of the military's role in that country.

"Internally in Pakistan, there's going to be a much more intense debate now on whether the Army has put the country on a good course," he said.

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Associated Press writers Matthew Lee in Washington and Sebastian Abbot in Islamabad contributed to this report.

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U.S. withholds $800 million in aid to Pakistan: White House (Reuters)

WASHINGTON (Reuters) – The United States is withholding some $800 million in military assistance to Pakistan in a show of displeasure over its cutback on U.S. trainers, limits on visas for U.S. personnel and other bilateral irritants, the Obama administration said on Sunday.

Pakistani authorities have "taken some steps that have given us reason to pause on some of the aid which we're giving to the military," White House Chief of Staff William Daley said on ABC television's "This Week with Christiane Amanpour."

As a result, "We'll hold back some of the money that the American taxpayers have committed to give," he said, adding this amounted to about $800 million, or more than a third of the $2 billion given to Pakistan for security assistance.

The U.S. Defense Department said Pakistan's army had requested a "significant cutback" of U.S. military trainers and limited the ability of U.S. personnel to obtain visas.

"While the Pakistani military leadership tells us this is a temporary step, the reduced presence of our trainers and other personnel means we can't deliver the assistance that requires training and support to be effective," the department said in a written response to questions.

Bilateral ties have been under mounting strain as the United States has pushed one of its key counterterrorism partners to boost efforts against Taliban and other militants fighting western forces in neighboring Afghanistan.

Pakistan also is smarting from the surprise U.S. raid that killed al Qaeda leader Osama bin Laden on May 2 in a Pakistani garrison town, as well as U.S. drone attacks and night raids that have killed civilians as well as militants.

The New York Times, which reported the aid curtailment in its Sunday editions, said Pakistan has shut down a U.S. program that had been training paramilitary forces, sending home more than 100 U.S. trainers in recent weeks, and has threatened to close the base the CIA has been using for pilotless plane attacks on militant targets.

The U.S.-Pakistan relationship also was damaged last year after a CIA contractor in Lahore killed two Pakistanis he said were trying to rob him.

The Defense Department in its reply said a series of events over the last eight months "have affected our bilateral relations."

"We remain committed to helping Pakistan build it's capabilities, but we have communicated to Pakistani officials on numerous occasions that we require certain support in order to provide certain assistance," the Pentagon said.

"Working together, allowing an appropriate presence for U.S. military personnel, providing necessary visas, and affording appropriate access are among the things that would allow us to effectively provide assistance," it added.

The State Department added: "We are taking a very clear-eyed approach to our relationship with Pakistan - weighing both the importance of a continued long-term relationship and the importance of near-term action on key issues.

The United States will continue to work with Pakistani leaders "to affirm the importance of cooperating toward our shared national security objectives," the department added in a written reply to a query.

(with additional reporting by John Crawley, editing by Cynthia Osterman)

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US: Pakistan must show it wants Afghan peace (AP)

KABUL, Afghanistan – Washington's special envoy to Afghanistan said Monday that Pakistan must prove it wants an end to the war by preventing militants from hiding out on its soil and enabling those who launch attacks on the Afghan side of the border.

Marc Grossman, U.S. special representative to Afghanistan and Pakistan, said in Kabul that discussions among Afghanistan, Pakistan and the United States being held this week in the Afghan capital are important to coordinate efforts to find a political resolution to the nearly decade-long war.

He said they also are an opportunity to clearly convey to Pakistani officials that part of their responsibility for bringing peace is to stop supporting insurgent safe havens and those who attack Afghans and international forces in Afghanistan.

"We've been pretty clear that going forward here, we want the government of Pakistan to participate positively in the reconciliation process," Grossman said at a news conference. "Pakistan now has important choices to make."

Grossman and representatives from more than 40 nations are attending a meeting of the International Contact Group. The group's 11th meeting comes after President Barack Obama announced last week he was ordering 10,000 U.S. troops home by year's end; as many as 23,000 more are to leave by September 2012. That would leave 68,000 U.S. troops in Afghanistan.

The 33,000 total to be withdrawn is the number Obama sent as reinforcements in December 2009 as part of an effort to reverse the Taliban's momentum and hasten an eventual political settlement of the conflict. The U.S. and its allies plan a full combat withdrawal by the end of 2014.

Michael Steiner, German representative for Afghanistan and Pakistan, said at the news conference that the international community's engagement will not end in 2014, when Afghan security forces are to have the lead responsibility for security across the nation, a process he said is on track.

"I think we have a strategy which is working despite the difficulties we have," Steiner said. "I am not painting here any illusions. We will have problems ahead. But I think we have a realistic strategy."

Separately, the U.N. World Food Program announced Monday it will cut food assistance to more than 3 million Afghans in about half the country's 34 provinces because of a shortage of money from donor nations.

The U.N. agency said it had planned to help feed more than 7 million people in Afghanistan this year, but a shortage of donor funds means only 3.8 million people will be helped through meals provided at schools and training and work programs. It said it needed an additional $220 million to continue its work in Afghanistan at the level originally planned.

The program will focus food assistance on helping the most needy Afghans, especially women and children, said Bradley Guerrant, the agency's deputy country director.

"We are working hard to raise the funds needed to restart these activities as soon as we can," he said.

Also, two roadside bomb blasts killed seven civilians Monday in Ghazni province in eastern Afghanistan, the Interior Ministry said. A vehicle struck one of the bombs in Qarabagh district, killing four civilians, including two children, the ministry said. Another vehicle hit a roadside bomb in Ghazni city, killing three civilians.

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With Afghan withdrawal, US focus turns to Pakistan (AP)

ISLAMABAD – As the U.S. looks ahead to its phased withdrawal from Afghanistan, even more attention is being directed toward Pakistan, where Obama administration officials say al-Qaida and its allies are still plotting attacks against the West.

They argue that threat has been effectively neutralized in Afghanistan, a key justification for President Barack Obama's announcement Wednesday that the U.S. will withdraw 33,000 troops from Afghanistan by next summer. The U.S. invaded Afghanistan in 2001 because al-Qaida used it as the base to launch the 9/11 attacks.

Afghanistan could take on new significance for the U.S. as a base to launch unilateral strikes against militants inside neighboring Pakistan, an unstable nuclear-armed country that many analysts say is more strategically important than Afghanistan.

That future has become more likely as the relationship between Pakistan and the U.S. has deteriorated following the American raid that killed al-Qaida chief Osama bin Laden not far from the Pakistani capital last month. The operation humiliated Pakistan, which cut back on counterterrorism cooperation with the U.S., a popular move in a country where anti-American sentiment is rife.

"We haven't seen a terrorist threat emanating from Afghanistan for the past seven or eight years," said a senior administration official in a briefing given to reporters in Washington before Obama's speech. "The threat has come from Pakistan over the past half-dozen years or so, and longer."

One of the most high-profile attempted attacks against the U.S. homeland coming from Pakistan recently was by Faisal Shahzad, a Pakistani-American who tried to set off a car bomb in New York's Times Square last year. He allegedly traveled to Pakistan's tribal areas and coordinated his attack with the Pakistani Taliban.

Since Pakistan effectively prohibits American troops inside the country and has been a reluctant ally in targeting militants the U.S. deems a threat, Washington has increasingly relied on covert CIA drone missile strikes to target al-Qaida and Taliban fighters holed up in Pakistan's mountainous border region with Afghanistan.

The U.S. refuses to acknowledge the drone program in Pakistan, but Obama alluded to its effectiveness in his speech, saying "together with the Pakistanis, we have taken out more than half of al-Qaida's leadership."

But the future of the drone program in Pakistan could be threatened by pervasive anti-American sentiment and anger over the U.S. commando raid that killed bin Laden in the garrison town of Abbottabad on May 2.

The drones are extremely unpopular in Pakistan, and lawmakers took the opportunity to demand the government, which is widely believed to allow the drones to take off from bases inside the country, halt the program.

That demand found resonance with Pakistanis, nearly 70 percent of whom view the U.S. as an enemy despite billions of dollars in American aid, according to a recent poll conducted after the bin Laden raid by the Washington-based Pew Research Center. Only 12 percent of Pakistanis have a positive view of the U.S., according to the poll, which had a margin of error of plus or minus four percentage points.

If Pakistan were to prevent drones from taking off from inside the country, the U.S. would have to launch them from Afghanistan, an act that would further increase tensions in the region, said Riffat Hussain, a defense professor at Quaid-e-Azam University in Islamabad.

"The staging area would then become Afghanistan, which would be totally anathema to Pakistan because then you are using another country's territory for attacks against Pakistan," Hussain said. "That will not only escalate tension between Pakistan and Afghanistan, but it means America has declared war on Pakistan."

The U.S. has also made it clear that if it obtains intelligence on future high-value terrorist targets inside Pakistan, it could stage special forces attacks from Afghanistan like the one that killed bin Laden.

The raid infuriated Pakistan because the government wasn't told of it beforehand. U.S. officials have said they kept the Pakistanis in the dark because they were worried that bin Laden would be tipped off by extremist sympathizers in the Pakistani military.

Pakistan responded to the raid by kicking out more than 100 U.S. troops training Pakistanis in counterterrorism operations and reduced the level of intelligence cooperation — something that could make it more difficult for the U.S. to target militants in the country.

One of the primary causes of U.S. frustration with Pakistan is its unwillingness to target Afghan Taliban militants and their allies in the country who launch cross-border attacks against NATO troops in Afghanistan. Pakistan says its troops are stretched too thin by other operations, but many analysts believe the government is reluctant to attack groups with which it has historical ties and could be useful allies in Afghanistan after foreign forces withdraw.

Hussain, the defense professor, said the beginning of the American withdrawal from Afghanistan and Obama's admission that the U.S. would support reconciliation talks with the Taliban made it even less likely that Pakistan would target militants deemed a threat by Washington.

"If you are talking to the Taliban, then you can't expect Pakistan to go after them," Hussain said.

Obama said he would press Pakistan to tackle the militant threat inside the country, but also implied the U.S. would not hesitate to go it alone when its security was endangered.

"For there should be no doubt that so long as I am president, the United States will never tolerate a safe-haven for those who aim to kill us," Obama said.

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