Bush has decided to exempt Pakistan from a law that restricts funding to the countries where the legitimate head of state has been deposed in a military coup with a view to facilitating the transition to democratic rule, the White House said adding it was important to US efforts to respond to, deter, or prevent acts of international terrorism.

It said Bush, who had given the waiver to Pakistan every year since 2003, had asked the US Congress for about 300 million dollars for security assistance to Pakistan.

White House spokesman Gordon Johndroe said the Bush administration still had concerns about the human rights situation in Pakistan, where President Pervez Musharraf overthrew the then prime minister Nawaz Sharif in a bloodless coup 1999, but stressed was a key ally in the 'war on terror.'

"The Pakistani government is conducting military, police, and intelligence operations to fight terrorist groups on Pakistani soil and bring terrorists to justice," Johndroe said.