Pakistan has welcomed the decision by the US to lift economic sanctions imposed in 1998 after its tit-for-tat nuclear tests with India.
In what is seen as a quid pro quo for co-operating in the planned military actions against Afghanistan, the White House announced that President Bush had decided to waive the sanctions because they were not "in the national security interests of the United States".
While welcoming the move, Pakistan's Foreign Minister, Mr Abdul Sattar, noted that further sanctions relating to the 1999 coup that brought Gen Musharraf to power were not lifted.
"It may be pointed out that 508 sanctions continue to remain in force," he said.
Similar sanctions imposed on India were also lifted. However, the Indian Finance Minister said the move had little more than token significance.
He said that in principle, nonetheless, it was a good development. "Our point of view has always been that sanctions were not an effective tool and in a sense that position has been borne out now."
The lifting of economic sanctions means the US can now vote in favour of multilateral aid packages such as the Poverty Reduction and Growth Facility that Pakistan is about to begin negotiating with the International Monetary Fund to help its ailing economy.
The sanctions imposed on India and Pakistan included bans on foreign assistance, munitions sales and licences, government credits and financial assistance, and US support for multilateral financial assistance.
The US Secretary of State, Mr Colin Powell, yesterday lauded the Pakistani President's decision to support the US offensive against Osama bin Laden as "courageous" and predicted his government would remain stable despite pressure from Muslim groups.
Mr Powell also said he had no concerns about risks to Pakistan's nuclear weapons programme.
"Everything I've seen over the past two weeks convinces me that President Musharraf made a courageous decision and he did it with full awareness of the potential domestic consequences," he said.
Meanwhile, Afghanistan's ruling Taliban claimed yesterday that bin Laden had gone missing and they could not deliver an edict asking him to leave the country.
The Taliban spokesman, Mr Abul Hai Mutmaen, said: "We have still not been able to deliver the clerics' message to him because we could not find him."
Asked if the Taliban's most infamous guest was still in the country, he replied: "I cannot say."
The Taliban were reported yesterday to be busy building bunkers, installing anti-aircraft batteries and arming men in key border areas to defend the country against expected attack from the US.
Pakistan has set up a new refugee camp on its Afghan frontier.