WASHINGTON, Sept 27: President Asif Ali Zardari has denied that US and Pakistani forces had exchanged fire along the Afghan border this week, even as the chairman of the US Joint Chiefs of Staff acknowledged the two sides engaged in a brief firefight.

Mr Zardari told The Washington Post in an interview published on Saturday that Pakistani border forces shot warning flares on Thursday at two US helicopters that he believes inadvertently crossed into Pakistani territory from Afghanistan. He said there was no gunfire exchanged between the two sides.

“We fired flares at them,” he said.

But Admiral Michael Mullen, chairman of the US Joint Chiefs of Staff, told journalists in Washington on Friday that Pakistani forces fired on two US helicopters supporting a ground unit and that American troops responded with small-arms fire.

“There was a cross-border fire incident yesterday,” Mr Mullen said, corroborating reports from US and Nato military officials.

Mr Zardari, however, played down the significance of American incursions into Pakistan in recent weeks, referring to a Sept 3 operation that led Pakistan to accuse US commandos of killing 20 people in a South Waziristan village as a “one-off” incident.

He praised President Bush’s leadership in the fight against terrorism. “Obviously, the world is a safer place,” he said. “It could have been worse.”

At the same time, Mr Zardari warned that “the axis of evil is growing.” He cited last Saturday’s massive bombing at the Marriott Hotel in Islamabad, which killed more than 50 people, and pressed the Bush administration to step up intelligence cooperation with Pakistan to help confront militants.

“God has given us the opportunity to do the job,” he said. “I think Pakistan has the right credentials and I have the right credentials and strength to face them. I’ve been through a tough life . . . and that tough life has prepared me to become even tougher.”

Mr Zardari also discussed a plan to persuade Afghan farmers to plant corn instead of opium to take advantage of rising prices sparked by the burgeoning US ethanol industry. “We can try to grow corn in Afghanistan and give them the same returns they’re getting from opium,” he said.

The president said he has asked UN Secretary General Ban-Ki Moon to conduct a wide-ranging inquiry into Benazir Bhutto’s slaying. But he said he is less interested in holding the killers to account than having the United Nations produce an exhaustive document that recognises his wife’s democratic crusade in the face of extremism.