Bush dashes Pakistan's hope for aid

WASHINGTON -- President Bush praised Pakistan President Pervez Musharraf for showing "great courage and vision" in the war against terrorism and pledged Wednesday to help trim his nation's $3 billion debt.

But Bush dashed Musharraf's hopes for trade benefits, fighter jets and a U.S. commitment to mediate disputes between Pakistan and India.

Musharraf returned Bush's compliments and said terrorist mastermind Osama bin Laden was not using Pakistan as a refuge. "I would certainly think that he is in Afghanistan, either dead or alive," the Pakistani leader said.

In a joint news conference, conducted beneath a presidential seal in the White House's marble foyer, Bush also addressed possible threats from Iraq and said he was considering all options to keep Saddam Hussein in check.

U.S. officials say the president has directed his war council to develop and refine a full range of alternatives on Iraq -- including military action -- that could be used to topple Saddam.

"I'm serious about defending our country," Bush said. He has accused Iraq of working to develop weapons of mass destruction that could be used by terrorists.

Unlikely ally

Musharraf was questioned about the kidnapping of an American journalist in Pakistan. He said he was "reasonably sure" Daniel Pearl was alive, expressed hope that Pearl would be released soon and said Pakistan's steps to "crush extremism" among Islamic fundamentalists may have given a motive to the kidnappers.

Musharraf, 58, might seem an unlikely ally for the administration.

He took power in a coup in 1999, and was viewed with deep suspicion by both the Clinton and Bush administrations. When Bush ran for president, he couldn't answer when asked to identify Pakistan's leader.

The relationship was transformed after terrorists attacked Sept. 11. Bush went to war against the al-Qaida network based in Afghanistan, which borders Pakistan, and forced Musharraf to choose between the United States and militant anti-American factions in his own country.

No promises made

At considerable risk to his government's stability, Musharraf cut ties with Afghanistan's ruling Taliban regime, shared intelligence with the United States and allowed America to use Pakistani air bases and air space. In return, Bush dropped long-standing economic sanctions, committed as much as $600 million in loans and aid and encouraged the International Monetary Fund to give Pakistan a $135 million loan.

Hoping to benefit further from his new alliance with America, Musharraf came to Washington seeking relief from his country's debt, lower tariffs for Pakistan textiles and approval to buy military goods from the United States. After nearly two hours of talks, Musharraf declined to say whether Bush had made a dent in Pakistan's wish list.

Later, White House spokesman Ari Fleischer said Bush offered $200 million atop the $600 million in U.S. aid already offered Pakistan. The new money can be used to erase $1 billion in Pakistan debt, he said.

Pakistan wants the administration to release 28 American F-16 fighters sold to Pakistan in the 1980s, when it was an ally against the Soviet Union. The planes were withheld by Congress when Pakistan developed nuclear weapons, and Fleischer said there has been no change in Bush's opposition to the sales.

U.S. textile manufacturers oppose Pakistan's request for lower textile tariffs. Fleischer said Bush made no promises on the issue but talks would continue.