A prominent Washington, DC-based think-tank has warned of greater risks if the United States continues to support the "undemocratic" regime in Pakistan.

"Pakistan has only a veneer of a democratic government and by supporting the (President Pervez) Musharraf regime, the US subjects itself to the same potential risks inherent in supporting Saudi Arabia and Egypt," the Cato Institute has recommended in a study.

If Washington is seen as supporting an illegitimate, oppressive or corrupt regime, US becomes a potential target for militant Islamists, who would otherwise direct their rage only at the regime, a policy analysis paper authored by Charles V Pena, Director of Defence Policy Studies at the institute said.

"The United States cannot turn a blind eye (as it seemingly does in Saudi Arabia) to the fact that Pakistan may be enabling and facilitating Al Qaeda terrorists," it warned, and suggested a "more arms length" relationship with Islamabad.

Terror organisations like the Harkat-ul-Mujahideen, Lashkar-e-Tayiba and Jaish-e-Mohammed, designated as foreign terror groups by the state department, continue to operate in Pakistan, it said.