Buoyed by a ceasefire deal negotiated by Pakistan in 2007, the Al Qaeda [Images] has rebuilt some of its pre-September 11 capabilities, leading to major spike in attacks within the country and neighbouring Afghanistan, the United States State Department's latest annual terrorism report says.

Attacks in Pakistan more than doubled from 375 to 887 between 2006 and 2007, and the number of fatalities jumped by almost 300 per cent from 335 to 1,335, the report said.

In Afghanistan, the number of attacks rose by 16 per cent, to 1,127 incidents last year, killing 1,966 people, 55 per cent more than the 1,257 who died in 2006, it said.

The ceasefire negotiated by Pakistan in 2007 gave Al Qaeda leaders "greater mobility and ability to conduct training and operational planning, particularly those targeting Western Europe and the United States," it said.

"Numerous senior Al Qaeda operatives have been captured or killed, but Al Qaeda leaders continued to plot attacks and to cultivate stronger operational connections, that radiated outward from Pakistan, to affiliates throughout the Middle East, North Africa, and Europe," the report said.

But senior US officials voiced cautious support for Pakistan's new government, led by Prime Minister Yousaf Raza Gillani, who has vowed that rooting out terrorism in the country's lawless tribal areas would be Islamabad's highest priority.

"This government has a chance to really move forward in its own security internally," Dell Dailey, coordinator of the State Department Office for counter-terrorism, said.

"We think that all the tools are in place for this treaty to have the successful outcome. They certainly know that the United States is watching it. And we'll articulate our concerns if it turns out to be not as successful as the one in the past," Dailey said.

Asked why the US is not making all out efforts to destroy the terrorist training camps, Dailey argued that the new Pakistani government has made it very clear that they will combat terrorism and extremism.

He noted that Gillani has said that he will not take military actions off the table. The Pakistan government will also, through economic and social development, try and reunite the Federally Administered Tribal Area with mainstream Pakistan, Dailey said.

"We want to let the Pakistani government do its best in democracy and good governance," he added.

Meanwhile, commenting on the terrorism report, White House press secretary Dana Perino expressed concern about the ceasefire agreement between the new government of Pakistan and Taliban leaders in its FATA, along the border with Afghanistan.

"Obviously this is something that was tried before. It did not work before. It's important that any agreement be effectively enforced and that it does not interrupt any operations, where we are going after terrorists in that area," she said.

State Department spokesman Sean McCormack also reacted cautiously. "We'll see. We'll see what comes of this effort."

"We understand that it is an attempt on the part of the Pakistani government to try to peel away those people who are reconcilable to a political process. So, this is an attempt on the part of the Pakistani government to try to achieve a positive goal. And certainly, we support that."

US President George W Bush [Images] has promised to seek US$ 3 billion from the Congress, in Economic Support Funds and Foreign Military Financing for Pakistan, during 2005-2009.

Since 2002, US assistance to Pakistan, including Coalition Support Funds, amounted to US$ 9.92 billion. The Bush administration has also requested US$ 845 million in assistance for Pakistan for 2008 and plans to seek US$ 785 million for 2009.