WASHINGTON (Reuters) - The United States should examine setting conditions for aid to Pakistan but not cutting it off, Defense Secretary Leon Panetta said on Wednesday, as he disclosed that Islamabad's closure of supply routes to the Afghan war cost American taxpayers millions of dollars a month.
Asked during a Senate budget hearing whether he would recommend halting aid to Pakistan, Panetta said: "I'd be very careful about just shutting it down."
"What I would do is look at conditions for what we expect them to do," Panetta said, without elaborating. He agreed to help write a letter to Congress with his recommendations for how to proceed with aid for the Pakistani military and government.
The comments came less than a week after Panetta, on a trip to Kabul, said the United States was reaching the limits of its patience with Pakistan because of the safe havens the country offered to insurgents fighting in neighboring Afghanistan.
The American war effort there has become more costly, Panetta said on Wednesday, because of Pakistan's decision last November to ban trucks from carrying supplies to NATO forces in landlocked, neighboring Afghanistan.
That forced NATO to use longer, more costly routes through northern countries. Panetta told Congress that the United States was spending about $100 million a month "because of the closure of the (routes)."
It was not immediately clear how much of the $100 million was additional cost.
The Pentagon has previously estimated that it cost between two and three times more to send supplies through the so-called Northern Distribution Network, but declined to offer a dollar figure on the costs.
"It's very expensive because we're using the northern transit route in order to be able to draw-down our forces and also supply our forces," Panetta said.
Pakistan shut down the supply routes to protest a cross-border NATO air attack that killed 24 Pakistani soldiers. That strike fanned national anger over everything from covert CIA drone strikes to the U.S. incursion into Pakistan last year to kill al Qaeda leader Osama bin Laden.
The United States on Monday announced it was withdrawing its team of negotiators from Pakistan without securing a deal to re-open the routes, publicly exposing a diplomatic stalemate and deeply strained relations between the uneasy allies.
One of the sticking points in the negotiations has been Pakistani demands that the United States apologize for the November strike, something the Pentagon has been unwilling to do. But Panetta acknowledged at the hearing that the apology wasn't the only issue.
"They're asking not only for that, but there are other elements to the negotiation that are also involved that have to be resolved," Panetta said.
(Editing by Cynthia Osterman)