Pakistan could "pull troops Afghan from border" if U.S. cuts aid

ISLAMABAD Tue Jul 12, 2011 12:20pm BST

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ISLAMABAD (Reuters) - Pakistan could pull back troops fighting Islamist militants near the Afghan border if the United States cuts off aid, the defence minister said on Tuesday in an interview with Pakistani media.

The United States on Monday said it would hold back $800 million (505 million pounds) -- a third of nearly $2 billion in security aid to Pakistan -- in a show of displeasure over Pakistan's removal of U.S. military trainers, limits on visas for U.S. personnel and other bilateral irritants.

"If at all things become difficult, we will just get all our forces back," Defence Minister Ahmed Mukhtar said in an interview with the Express 24/7 television to be aired later on Tuesday.

The television aired excerpts of the interview on Tuesday.

"If Americans refuse to give us money, then okay," he said. "I think the next step is that the government or the armed forces will be moving from the border areas. We cannot afford to keep military out in the mountains for such a long period."

In Pakistan, the defence minister is relatively powerless. Real defence and military policy is made by the powerful Chief of Army Staff, General Ashfaq Kayani, and the head of the Directorate of Inter-Services Intelligence, Lieutenant-General Ahmed Shuja Pasha.

On Monday, the military said it could do without U.S. assistance by depending on its own resources or turning to "all-weather friend" China.

Mukhtar later told Reuters Pakistan wanted the money spent on the maintenance of the army in the tribal areas. "This is what we are demanding," he said. "It is our own money."

The United States provides hundreds of million of dollars a year to reimburse Pakistan for deploying more than 100,000 troops along the Afghan border to combat militant groups.

Other funding covers training and military hardware. The White House announcement puts $300 million in reimbursement and another $500 million in aid in question.

Pakistan is an important ally of the United States but relations between the two uneasy allies have been on the downward spiral since last year when a CIA contractor killed two Pakistanis in January and then U.S. Navy SEALS killed Osama bin Laden in a secret raid in the Pakistani town of Abbottabad in May without informing Islamabad beforehand.

Islamabad sees the May 2 raid as a breach of its sovereignty and has drastically cut back on the numbers of U.S. troops allowed in the country and has set clear limits on intelligence sharing with the United States.

In Washington, Pentagon spokesman Colonel David Lapan on Monday said the $800 million in U.S. aid put on hold could be resumed if Pakistan increased the number of visas for U.S. personnel and reinstated the training missions.

(Editing by Chris Allbritton and Nick Macfie)

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