At a press conference with Pakistani President Pervez Musharraf at the Camp David presidential retreat, George W Bush said: “Greater economic development is … critical to fulfilling the hopes of the Pakistani people.”

Musharraf was praised by the US president for his leadership in fighting al-Qaeda and in helping ease tensions with India over the disputed Kashmir region.

"I'm hopeful that the two countries will deepen their engagement on all issues, including Kashmir," Bush said of links between Pakistan and India, both nuclear powers.

Bush also commented that Pakistani progress will “require movement toward democracy.”

Musharraf later remarked that over the past 50 years "we have had dysfunctional democracy in Pakistan. And what I am doing, really, is to introduce sustainable democracy."

Pakistan has long sought the  
F-16 fighter jet
 

Bush said he would work with the Congress on a five-year, $3 billion dollar assistance package “to help advance security and economic opportunity for Pakistan’s citizens.”

Half that money would be used for defence equipment and security.

No F-16s

Bush said F-16s would not be part of the aid package. "Nevertheless we want to work closely with our friend to make sure that the package meets the needs of the Pakistani people," Bush said.

"You're never going to escape this," Musharraf told Bush in a joking manner, referring to a reporter's question about the planes.

Analysts say that many in Pakistan have not forgiven the US for refusing to deliver 28 F-16 fighters in the 1990s due to concerns over the country’s nuclear programme.
 
Although he had hoped to gain more in trade concessions, Musharraf said the agreement was a step toward a free-trade pact.