CHICAGO: US and Pakistani leaders on Monday signaled optimism that a deal on reopening vital supply routes to Nato convoys was within reach as Islamabad ordered negotiators to seal an agreement.

President Barack Obama told reporters the United States and Pakistan were making “diligent progress” on an accord, after he briefly met Pakistani President Asif Ali Zardari on the sidelines of a Nato summit in Chicago.

Obama, however, said he had never expected the dispute to be solved during the Nato session.

Deadlock over the six-month blockade on Nato convoys on the Pakistani border has distracted from a carefully choreographed alliance meeting in Chicago, underscoring strained relations between the West and Islamabad.

“We didn't anticipate that the supply line issue was going to be resolved by this summit.

We knew that before we arrived in Chicago,” Obama said.

“But we are actually making diligent progress on it,” he added.

The large US military footprint in Afghanistan coupled with Washington's aggressive drone air raids against militants in Pakistan's tribal areas stirs deep public resentment in Pakistan.

“We need to work through some of the tensions that have inevitably arisen after 10 years of our military presence in that region,” said Obama, in an apparent reference to controversial drone strikes.

Zardari, in a speech at the summit, suggested his government wanted to resolve the issue.

Speaking to leaders from states in the Nato-led force in Afghanistan, Zardari said the cabinet's Defence Committee “decided to direct the relevant officials to conclude negotiations for resumption of the Ground Lines of Communication” needed to supply foreign troops.

Angered over a botched US air raid that killed 24 Pakistani soldiers, Islamabad shut the supply routes in November, forcing Nato to rely on longer, more expensive northern routes through Russia and Central Asia.

The roads through Pakistan are a crucial logistical link for Nato as it plans a large-scale withdrawal of combat troops and hardware by the end of 2014.

But US officials have so far rejected Pakistani proposals to charge steep fees of several thousand dollars for each alliance truck crossing the border.

Washington has also refused to issue an explicit apology for the lethal air raid.

In his speech, Zardari called the errant American air strike “a serious setback” that “required that we review our engagement and cooperation.” The Pakistani parliament, however, “has spoken in favor of cooperation and a partnership approach,” he said.

As the Nato summit broke on Monday, the differences between US and Pakistan widened further as both the countries were unable to strike a deal on restoring supply routes.

President Obama, during the closing ceremony of the summit showed his exasperation whilst saying that it is in Pakistan’s best interest to work along with United States unless the country wants to get consumed by extremist forces.

Obama did not meet President Zardari for any face-to-face bilateral talks during the summit and commented during a press conference that he only spoke one-on-one to his Pakistani counterpart on their way to the summit, very briefly.

"We think that Pakistan has to be part of the solution in Afghanistan. Neither country is going to have the kind of security, stability and prosperity that it needs unless they can resolve some of these outstanding issues," Obama said.

Nato chief Anders Fogh Rasmussen voiced optimism that Pakistan would soon reopen the supply routes, which commanders say are needed to conduct a withdrawal of troops and equipment on time.

“We didn't expect an agreement on the Pakistan transit routes to be reached at this summit. That was not planned,” Rasmussen said.

But he added: “I express some optimism as regards the possibility to see a reopening of transit routes in the very near future.”

British Prime Minister David Cameron acknowledged that the closed border crossing at Torkham gate was “frustrating” for the transatlantic alliance but said he expected the routes to reopen.

With the Pakistani roads shut, the northern supply routes into Afghanistan - negotiated with Russia and a network of governments in Central Asia and the Caucasus - have taken on growing importance.

Defence Secretary Leon Panetta on Monday met officials from five Central Asian countries on Monday - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan - to thank them for allowing Nato to transport supplies over roads and railways through their territories.

“The secretary expressed his deep appreciation for their support of the Northern Distribution Network, which is key to supplying Isaf (International Security Assistance Force) forces in Afghanistan,” Pentagon press secretary George Little said in a statement.

US officials acknowledge that for the planned withdrawal of Nato-led forces and equipment, the Pakistan route is much shorter and cheaper.

But analysts say Washington may try to negotiate arrangements with Russia and other states to allow weapons to be transported on the northern road and rail routes, reducing Nato's reliance on Pakistan.

Nato Agrees on Afghan Security Transition in 2013

President Obama and various other Nato allies decided unanimously to end their guiding role in Afghanistan's war, during the Nato summit on Monday. The leaders were of the view that it is time for the Afghans to take over the reins of their own country and that the foreign troops should go back home.

President Obama reiterated that US and its allies have broken the momentum of Afghan Taliban and publicly announced that the troops will be withdrawn from Afghanistan.