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India, Pakistan hail lifting of U.S. sanctions

ISLAMABAD, Pakistan (CNN) -- India and Pakistan have welcomed the lifting of U.S.-imposed sanctions as both countries commit to an international campaign against terrorism.

Maleeha Lodhi, Pakistani ambassador to the United States, reacted positively to the development Sunday but insisted that her government believed the Bush administration might have been inclined to review the sanctions whether or not Pakistan agreed to help the United States deal with terrorists based in neighboring Afghanistan.

"We are very pleased," Lodhi said on CNN's "Late Edition."

"It was long overdue. ... We hope this is the start of a process which will lead to a sanctions-free relationship between Pakistan and the United States," she added.

Lodhi insisted that Pakistan was not involved in any direct bargaining with the United States, saying participation in any effort to bring to justice those responsible for the September 11 attacks on New York and Washington was "the right thing to do."

"There is no question of bargaining, of trying to solicit some kind of a quid pro quo." she said. "We know that for several months the Bush administration had undertaken a review of their sanctions policy, and it is an outcome of that review."

A senior Pakistani official said Bush's decision lifts restrictions on military sales to Pakistan and makes the country eligible for much-needed fresh economic aid.

India has never regarded the sanctions as effective, and officials -- while welcoming the decision -- said the lifting of them is a vindication of their stance.

Analysts said the lifting of sanctions will have far greater effect in Pakistan than in India, where there will only be a minimal impact.

"This gives the Pakistani economy fresh air to breathe; it has room to recover," said analyst Brahma Chellaney in New Delhi.

Indian Foreign Ministry representative Nirupama Rao said: "With the removal of sanctions, we can strengthen a broad-base, forward-looking and mutually beneficial relationship with the U.S."

Concerns remain about the relationship between the powerful South Asia neighbors, whose tit-for-tat nuclear rivalry triggered the sanctions in the first place.

India is believed to be perturbed at the level of Pakistan's growing involvement in the push against suspected terrorist mastermind Osama bin Laden.

He is thought to remain in nearby Afghanistan, where he has been living for several years as a "guest" of the ruling Taliban.

The U.S. desire to move against bin Laden after terrorist attacks on New York and Washington is dramatically altering political alignments in South and Central Asia.

India has offered the United States use of its territory for a possible military strike against terrorists in Afghanistan and supplied investigators with intelligence on what it said are training camps funded by bin Laden not only in Afghanistan but also in Pakistan.

Pakistan's president, Gen. Pervez Musharraf, has announced Pakistan is standing with the United States against terrorism, but the decision has triggered violent street protests.

Shared intelligence

The removed sanctions included a ban on U.S. economic aid and a bar on selling or sharing so-called "dual use" technologies that had both civilian and nuclear-military uses, a result of 1998 nuclear testing.

President Bush says the lifting of sanctions is in the U.S. national interest.  

Bush had the power to waive those sanctions, but Congress would have to lift other sanctions against Pakistan applied in 1999 after Musharraf led a military coup that ousted an elected government.

In a memorandum to the secretary of state and a formal notification to Congress, Bush said it was "in the national security interests of the United States" that he lift the sanctions.

Senior Pakistani government officials said they have told the United States no Pakistani forces or equipment will be used in any attack the United States might launch against Afghanistan.

Pakistan has said that the United States can use its airspace and has agreed to share intelligence information.

But the officials said they would only allow the United States to have troops and equipment at bases somewhere inside Pakistan as a last resort.

They said they expected the United States to keep a low profile and be aware of the pressure on the government from hard-line Muslims who support the Taliban regime.

On Sunday, the crisis led Pakistan to cancel the South Asian Games that were due to be held October 6-15.

The games are contested every two years between India, Pakistan, Sri Lanka, Bangladesh, Bhutan, Nepal and the Maldives.

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