Anti-US feelings run high in Pakistan

The agreement between the US and one of its key allies in the war on terror is to be signed by the American ambassador, Nancy Powell, and the head of Islamabad's Economic Affairs Division (EAD), Waqar Masood, on Saturday.

The debt write-off is being seen as a reward from Washington to Pakistan for the latter's key support and cooperation in the campaign to oust the Taliban and al-Qaeda from neighbouring Afghanistan.

Pakistan supported the US in its war on terror in spite of strong anti-US sentiment among its people.

The $1bn write-off was offered by President George W. Bush when he met Pakistani President Pervez Musharraf in Washington in February last year.

September 11

At the time, the US President promised he would work with Congress to make sure the debt relief was pushed through for 2003.

At the end of 2001, Washington had also rescheduled $3bn worth of Pakistan's foreign debt, which at the time stood at $38.5bn.

In addition, the Bush administration was also supportive of a rescheduling of another $9bn by the International Monetary Fund.