Nirupama Subramanian

ISLAMABAD: Pakistan said on Monday it had taken up the reduction in its financial assistance package from the U.S. with Washington. It dismissed a link between the cutback and its refusal to hand over Abdul Qadeer Khan, the country's most important nuclear scientist, to the U.S. for interrogation.

"I do not think there is any relationship between the two," said Foreign Office spokeswoman Tasnim Aslam.

She said Pakistan had raised the issue with the Bush Administration. "We understand the [U.S.] Administration would work to ensure the original amount committed to Pakistan by President Bush is restored," Ms. Aslam said.

In 2005, Pakistan got $701 million in assistance from the U.S., under a $3 billion programme that Mr. Bush announced in 2003. The allocation is divided mainly between the Economic Support Fund and the Foreign Military Fund. The next year, Pakistan got a $695 million package. For 2007, the U.S. had earmarked $738 million, but this was now down by $150 million, Ms. Aslam said.

The slashed allocation was part of overall budget cuts, she said.

To a question on the former External Affairs Minister, Yashwant Sinha's statement that there was no room for Kashmiri representation in the India-Pakistan dialogue, Ms. Aslam said her Government was "comfortable" with the present process through which both countries were interacting with Kashmiri leaders to find a solution to the issue.

"Our position is that Kashmiris are part of the process and they should be able to sit at the table. Since this is not acceptable to India, we are comfortable with the Kashmiris being associated with the peace process through the other means," she said.

"For instance Kashmir leaders on both sides of LoC are interacting with each other. They are interacting with the Governments of Pakistan and India and since there are three parties to the disputes, they all have to be on board to resolve it."