The report "calls for an additional $4bn-$5bn of immediate financial aid for Pakistan to avert an economic meltdown", a statement by the council said.

"Given the tools and the financing, Pakistan can turn back from the brink. But for that to happen, it needs help now."

Appeasement concerns

However, some US politicians have already questioned the amount of aid given to Pakistan, and concerns have been raised over Islamabad's strategy for dealing with Taliban and al-Qaeda fighters after it reached a deal with religious leaders in the Swat valley area to introduce sharia, or Islamic law, as part of a truce.

Qureshi denied the Swat policy was "appeasement toward militants" [EPA]
Critics in the US, Europe, Afghanistan and India, have said the Swat move could embolden al-Qaeda and Taliban fighters in North West Frontier Province, which borders Afghanistan.

On Tuesday, Taliban fighters in Pakistan declared an indefinite ceasefire in the Swat valley, the group's spokesman said.

The Taliban imposed a strict version of sharia during its 1996-2001 rule in Afghanistan.

Shah Mehmood Qureshi, Pakistan's foreign minister, said the Swat policy represented a "local solution to a local problem" and was "not any appeasement toward militants".

And he received support from his Afghan counterpart Rangeen Dadfar Spanta, who said after talks with Qureshi that "the Afghanistan government has confidence in the leadership in Pakistan".

Improving ties

The Afghan and Pakistani foreign ministers were holding talks in Washington ahead of meetings with Hillary Clinton, the US secretary of state.

Qureshi and Spanta hailed improving relations between the neighbours, which in the past had deteriorated over border attacks by fighters.

"There is a new environment between Afghanistan and Pakistan," Qureshi said on Tuesday.

"The trust level, the confidence between the two countries, has increased manifold."