United States President George W Bush on Tuesday ruled out any immediate sale of F-16 fighter jets to Pakistan, making it clear that it will not be a part of a $3-billion package announced for Islamabad.

"In the package that we discussed, half of that money goes for defence matters of which the F-16 won't be a part," Bush said at a joint press conference at Camp David after he met Pakistan President Pervez Musharraf.

Bush's response came when a reporter referred to media reports quoting Deputy Prime Minister Lal Kishenchand Advani saying after his recent visit to the US that Washington had given an assurance that it would not sell F-16s to Pakistan.

The questioner asked whether the Pakistani people should believe Advani.

Musharraf interjected telling the president that he could not escape questions on this issue.

Bush responded saying Musharraf had been a 'strong advocate' for the sale of F-16s to Pakistan but made it clear that it won't be part of the package.

Pakistan had paid for 28 F-16 jets, which has been stalled in the wake of the 1998 anti-nuclear sanctions against Islamabad.

Bush declared that he will stand by and be ready to help resolve (the Indo-Pakistan tension) but said a final agreement will have to reached by the leaders of both Pakistan and India.

"We will do all we can to promote peace," Bush said.

Bush said he was encouraged by the moves Musharraf and Prime Minister Atal Bihari Vajpayee made in easing tension between the two sides. "I am hopeful the two countries will deepen their engagement on all issues, including Kashmir."

Musharraf, speaking after Bush, agreed that no cause can be justified or promoted through terrorist acts.

On Osama bin Laden, Bush said it could take days, months or years before the US and its allies complete its search.

Bush didn't directly answer a reporter's question about the whereabouts of bin Laden or deposed Iraqi president Saddam, saying, "There are more than two principals at large."

Bush praised Musharraf for setting out to build 'a modern Pakistan that is tolerant and prosperous' but said that 'will require movement toward democracy', particularly in enhancing the rights of women and girls.

At the meeting, said Bush, he and Musharraf discussed extremism and cross-border infiltration.

"Musharraf," said Bush, "is a courageous leader and a friend of the United States."

America, he said, has a strong relationship with Pakistan and the US has benefited from the industry and talents of Pakistani Americans.

Bush said both the US and Pakistan are threatened by global terror and are determined to defeat it.

"We also believe," Musharraf said, "that our relations with the United States are a factor of stability in South Asia. We are grateful to the United States for its constructive engagement in our region, and for its untiring efforts in diffusing tension and bringing about a dialogue process between Pakistan and India, aimed at the resolution of all outstanding issues, including the core issue of Kashmir."

"President Bush has assured me that he personally, and the United States, would remain firmly engaged in South Asia towards the end of bringing peace and harmony in the region," he said.

Bush said that he and Musharraf spent a lot of time on South Asia not only today but during previous meetings. "I assured President Musharraf," said Bush, "that the United States wants to help towards achieving a peaceful solution."

On the nuclear issue, Musharraf said that Pakistan is concerned about its security. "Pakistan follows a strategy of minimum deterrence. We are not into any arms race (with India) but we do maintain forces to ensure this strategy of minimum deterrence."

"And that is what we will keep doing to guard our honour and dignity. We have, as far as India is concerned, our sovereign equality to guard, vis-a-vis India. And this is what we pursue whenever we are talking of any defence-related issues," he said.

On democracy in Pakistan, Bush said he and Musharraf talked about the reforms that the military ruler is putting in place.

"He (Musharraf) is dealing with the madrassas in a way that is productive and constructive. He is working on a national curriculum that will focus on basic education. I will let him describe his vision. But this country is committed to democracy, and we are committed to freedom," he said.

"We are also committed to working with our partner to fight off the influences of terrorism. And we have had no better partner in our fight on terror than President Musharraf," he said.

On a question put to Musharraf on whether there was any movement towards democracy in Pakistan, the military ruler said, "Let me assure you it may sound rather odd that I, being a military man, am talking about democracy But let me assure you that I am extremely concerned about introducing sustainable democracy in Pakistan."

"Over the last 50 years, five decades, we have had dysfunctional democracy in Pakistan. And what I am doing, really, is to introduce sustainable democracy. Let me assure you, all the constitution changes, all the political restructuring that we have done is in line with ensuring sustainable democracy. We will continue with this process, to ensure that democracy is never derailed in Pakistan. That is my assurance," he said.

He said Pakistan 'enjoys a  special' relationship with the US.

"We look forward to diverse programmes of cooperation in the economic, commercial, political and defence sectors. We also expect greater people-to-people contacts and close interaction between the Parliaments of the two countries to promote the cause of democracy," he said.

As a result of this commitment, he said, two important agreements will be signed -- one on trade and investment framework and the other on cooperation in the field of science and technology.

Musharraf said that he and Bush reviewed the situation prevailing in Afghanistan. They reiterated their firm support to the Bonn process and to the government of President Hamid Karzai.

"It is important," said Musharraf, "that the world community remains engaged in Afghanistan, and lives up to its commitment towards the reconstruction and development of this devastated country."

Musharraf said that they also discussed a number of other important issues, such as the situation in Iraq and the Middle East peace process.