Pakistan is responsible for the worsening security situation in South Asia and the West is reinforcing the region's instability by continuing to support the country's military regime, according to a US think tank.

A report by the Carnegie Endowment said Pakistan's military is complicit in the worsening situation in Afghanistan, the resurgence of the Taliban, terrorism in Kashmir and the growth of jihadi ideology.

And the current policies of the West toward Islamabad only reinforces its political weakness and contributing to regional instability by allowing Pakistan to trade democratisation for its cooperation on terrorism, the report 'Rethinking Western Strategies Toward Pakistan: An Action Agenda for the United States and Europe,' authored by Frederic Grare, said.

'The military not only sets Pakistan's foreign policy, it also shapes domestic politics by nourishing a climate of insecurity and sectarian violence, allowing it to portray itself as the only bulwark against extremism,' Grare wrote.

'Demilitarising Pakistan and setting it on the long path toward democracy are therefore prerequisites for the long-term stability of the region,' he added.

The report also said restoration of a stable civilian rule would lessen Pakistan's obsession with the threat posed by India and focus the country's energy on its own economic development.

Accusing the Pakistan army of inflating the threat of religious sectarianism and jihadi extremism for its own self-interest, the report said the West adopted a more lenient attitude toward the regime due to a perceived lack of alternative.

The report suggests that the US's financial assistance to Pakistan should be dependent on results in the fight against terror, and the Bush administration should be willing to impose sanctions if Islamabad fails to meet its commitments.

But the general population should, as much as possible, be shielded from affects of withholding assistance, it stressed.

The report also pointed to the fact that out of the approximate $10 billion in assistance given to Pakistan since September 11, 2001, only $900 million has gone to development -- the bulk being channelled to the military.

Grare also urged the US to 'cease its campaign against political Islam in Pakistan.'

'It has proven counterproductive and made US policy dependent on Pakistan's military, which claims to be the strongest rampart against religious extremism,' he said.