WASHINGTON, June 22: The US Congress was told on Tuesday that the moderates and extremists in Pakistan were engaged in a battle for "the soul" of their country and there's no easy solution to this conflict.

Briefing the House Committee on International Relations, US Assistant Secretary of State for South Asian Affairs said while Pakistan was dealing effectively with external threats, it's finding it more difficult to deal with the domestic terror.

"The dealing with the domestic terror - is rather complicated and - I don't believe there's an easy solution to it because there is a battle going on for the soul of Pakistan at the moment between extremists and moderates," she said.

"Terrorist attacks in Pakistan over the last year, including the two attempts on the life of President Musharraf, remind us that progress hangs in the balance," she added.

Praising the role the Pakistani military was playing in the fight against terror, Ms Rocca noted that 77 Pakistani soldiers lost their lives in anti- terror operations in the tribal areas since the beginning of this year.

Other security personnel, she said, have been killed in Karachi and elsewhere, and numerous Pakistani civilians have been murdered in terrorist attacks. The US military assistance, she said, facilitated the capture of Al Qaeda and Taliban remnants and strengthened America's military ties with Pakistan.

Besides military assistance, she said, the US administration was also providing economic assistance to help Pakistan deal with the conditions that breed terror.

The US official said that "a return to full democracy" was central to Pakistan's long-term stability and noted that "after a prolonged impasse, Parliament is beginning to function and a devolution programme has begun to revitalize local government."

Ms Rocca said the recent agreement between India and Pakistan to pursue a wide-ranging composite dialogue was "a real breakthrough." She noted that India and Pakistan have agreed to seek a peaceful settlement of all bilateral issues, including Kashmir.

"We're encouraged by the confidence-building measures agreed upon in recent months and days, and hope they will be implemented quickly and that there will be further progress along these lines," she said.