"We discussed the F-16 issue," Musharraf told reporters outside the White House after his meeting with the US leader.

"That is all I would like to say, thank you," he added in a terse comment when asked about the prospective US sale of the fighter jets.

Musharraf, a key ally in Bush's "war on terror," did not say whether any decision was made at the meeting.

Bush, speaking in the Oval Office along Musharraf, said the United States wanted to work closely with Pakistan in the defense arena as part of an overall relationship covering joint efforts to battle terrorism, improve trade and resolve the Middle East conflict.

The US leader spoke of "a defense relationship which is one in which there is close collaboration and complementary efforts based upon the true threats of the 21st century."

Musharraf also met with outgoing Secretary of State Colin Powell who said "there's always the issue about F-16s but no decisions were made at the meetings today."

Powell said he spoke with Musharraf about India, adding: "they are talking to each other, and that's good compared to where they were two years ago."

Musharraf has won Bush's firm alliance since he sided with Washington to oust Afghanistan's Taliban rulers, originally backed by Pakistan, after the September 11, 2001 attacks.

Pakistan is now in the frontline of the global crackdown on terrorism, and its security forces have captured some 600 Al-Qaeda suspects in the past three years.

Pakistan reportedly wants to buy up to 25 of the F-16s, which cost around 25 million dollars each, by mid-2005 to add another squadron of such planes to the nuclear-armed nation's existing fleet.

Pakistani officials said earlier that Musharraf would raise defense needs when he met with Bush, but the White House had downplayed any imminent F-16 deal at the talks.

Any defense sales to Pakistan will be watched closely by its nuclear-armed archrival India, which has reportedly expressed interest in buying the US Patriot missile system that can defend against ballistic and cruise missiles and aircraft.

Some critics in the South Asian nations have raised concerns that the potential arms sales could further fuel a regional arms race and political instability while the two rivals hold delicate peace talks to resolve the thorny Kashmir dispute.

Pakistan has a long-standing military rivalry with India, with which it has fought three wars since independence from Britain in 1947.

The US Senate late Saturday approved a 388-billion-dollar budget which includes military aid to Pakistan and its war-torn neighbor Afghanistan.

The allocation of 300 million dollars for Pakistan is designed to bolster the capabilities of its armed forces in hunting down suspected Al-Qaeda members along the Afghan-Pakistani border.

The military aid approval follows notification by US defense officials of a possible 1.3-billion-dollar arms package for Pakistan.

The package includes eight P-3C Orion planes to beef up surveillance of its coasts and borders to stop the movement of terrorists and drug smugglers, US defense officials had said.

It would be the largest US foreign military sale to Pakistan since sanctions against Islamabad were lifted in late 2001 as a reward for supporting US forces fighting Taliban and Al-Qaeda forces in Afghanistan.

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