WASHINGTON, Feb 9: US Secretary of State Colin Powell talked to President Pervez Musharraf and Indian Foreign Minister Jaswant Singh on Wednesday as part of the “periodic contacts with these two leaders” on the continuing Indo-Pakistan standoff.

Disclosing this at his afternoon briefing on Friday, State Department spokesman Richard Boucher said the US remained encouraged by the willingness of both sides to resolve the situation politically and diplomatically.

“We continue to work with both sides to make sure that we find ways to pursue that course.”

But, Mr Boucher said, he did not “want anybody to think the situation is not tense; there are still issues there that need to be dealt with. And the two sides need to look at, obviously, in the longer term, trying to see if they can’t get back to a dialogue with each other that can resolve some of the more fundamental issues there”.

Referring to General Musharraf’s visit to Washington next week, Mr Boucher said the US would be discussing a wide range of issues relating to “our renewed bilateral relationship. Continued cooperation with Pakistan in the coalition against terrorism is obviously one of the most prominent issues. Our desire to continue to support Pakistan’s programmes of economic and educational reform, and its restoration of democratic civilian rule are also important issues for us. And furthermore, we will discuss the process of peace and reconstruction in Afghanistan, and the current Indo-Pakistani tensions”.

Mr Boucher made clear that the $600 million given in economic support for the Pakistan government this year were meant to be used for educational and economic programmes.

“This is the direction that President Musharraf set in his discussions with Secretary Powell last fall, and again earlier this year. And that’s what we intend to support and continue supporting. .... The primary use of that $600 million in economic support funds was going to be for these kinds of programmes”.

There have been some reports that Pakistan might use that money for budgetary and balance of payments support.