Pakistan may not get its 28 F-16 fighter jets in the near future, but the United States has adequately compensated it for the disappointment with a massive $3-billion economic and military package.

The five-year aid package will also be a salve for US's rejection of another of Pakistan President Pervez Musharraf's emotional plea -- US intervention in the Kashmir imbroglio.

The American largesse is reminiscent of the massive economic and military aid that flowed to Pakistan during the Cold War years during the Reagan administration following the erstwhile Soviet Union's invasion of Afghanistan.

Pakistani military dictator at the time Mohammad Zia ul-Haq had milked the US for all its worth, preying on US apprehensions of Soviet expansionism and the usefulness of Pakistan as a strategic bulwark.

Senior administration sources told rediff.com that a consensus had been reached by an inter-agency panel comprising the White House National Security Council, the state department and the Pentagon that providing Islamabad with F-16s would throw a spanner into the burgeoning US-India ties.

But, the sources added, mindful of the need for Musharraf to go back with something substantial to show, the inter-agency panel decided on the huge aid package.

Musharraf, according to US officials, in his meeting with Bush had implored the latter to provide the F-16s as it would assure the Pakistani people that the US was genuinely intent on fostering US-Pakistan ties and also silence his critics, who have maintained that there has been no quid-pro-quo for Pakistan's support against the Taliban and Al Qaeda.

Bush himself acknowledged this effort by Musharraf as much, when he said at the joint press conference, "Let me just say the president is not afraid to bring up the issue of F-16s, (and) he has been a strong advocate of the sale of F-16s to Pakistan."

The sale of F-16s to Pakistan was stalled in October 1990, during Bush senior's administration, because of Islamabad's clandestine nuclear weapons programme.

The US subsequently after years of protracted and often bitter negotiations refunded the monies to Pakistan, although Islamabad complained that it had paid millions in storage fees.

Half of the money earmarked in the current aid package will go for 'defence matters'. "Nevertheless, we want to work closely with our friends to make sure that the package meets the needs of the Pakistani people," Bush said.

This is obviously going to cause heartburn in Indian government circles. The defence component of the package will comprise sophisticated weapons systems that could significant beef up Pakistan's conventional arsenal.

Administration officials acknowledged that the package was expected to face stiff congressional opposition both in the House and the Senate, but said, "The president is committed to providing Pakistan with this assistance and would go to the extent of using his national security waiver to push it through if Congress vetoes it."

On the issue of US mediation on the Kashmir issue, officials said the administration had 'absolutely no intention' of making any dramatic shift in its policy.

The US has consistently maintained that the issue has to be resolved bilaterally taking into account the 'wishes of the Kashmiri people' and that it sees its role as that of 'encouraging dialogue between the two parties'.

It was also clear from Bush's response to the Kashmir situation that Musharraf had pleaded for US intervention on the Kashmir issue, but that Washington scrupulously wanted to eschew inserting itself unless invited by India too.

"I assured President Musharraf that the United States wants to help toward achieving a peaceful solution. Our role will be to aid the process forward. The decision-makers will be the Pakistan government and the Indian government. These are the governments that have to decide how to resolve the issue, which had been a thorn in both people's sides," he said.

"One thing is for certain," he added. "We almost worked together to fight off terrorists who would like to prevent a peaceful solution. There needs to be a 100 per cent effort with all parties, sides involved with the issue must focus on not allowing a few to undermine the hopes of many and the president knows I will remain engaged."

"I stand by ready to help, but the truth of the matter is for there to be any final agreement, it's going to require leadership from both the Pakistan government and the Indian government."

On whether Bush came down hard and extracted a pledge from Musharraf that he would permanently halt cross-border terrorism administration sources said the president had indeed strongly pressed Musharraf on this issue.

But, they said, the action taken by Musharraf on the eve of his departure in freezing the accounts of some of the leading terrorist groups and a decrease in the infiltration across the Line of Control, reported by the Central Intelligence Agency, helped the Pakistani leader to argue that he was making 'a good faith effort'.

"In our meeting, we discussed the need to address extremism and cross-border infiltration, and I assured the President that the United States will do all we can to promote peace," Bush said.

Of concern to India would also be the fact that the package is not conditional on Pakistan halting cross-border terrorism.

Complete transcript of the Bush-Musharraf press conference