Islamabad: US Secretary of State Hillary Clinton on Sunday called for Pakistan to take "additional steps" to counter terrorism, in an interview with the BBC just after her arrival in Pakistan.
"There are still additional steps that we are asking and expecting the Pakistanis to take," she told the corporation.
Hillary noted that Washington and Islamabad had "increased our cooperation, deepened our relationship, when it comes to fighting terrorism”.
"But there is no doubt in anyone`s mind that should an attack against the United States be traced to be Pakistani it would have a very devastating impact on our relationship," she added.
A Pakistani-American arrested over the botched car bombing in New York`s Times Square in May allegedly received explosives training from experts linked to the Pakistani militant group the Tehrik-e-Taliban, in December 2009.
The group operates from the tribal zones of Pakistan, considered by Washington to be the global headquarters of the Pakistani Taliban and their allies in al Qaeda, as well as a base camp for the Afghan Taliban.
Hillary said all the groups were linked and called on Pakistan not to distinguish between them.
She confirmed that Washington planned to formally designate Pakistan`s Haqqani network as a foreign terrorist organisation.
The Haqqani network, which is battling coalition troops in Afghanistan and is thought to have close links with Pakistan`s intelligence services.
The New York Times reported on Wednesday that US General David Petraeus, recently named head of the coalition, was in favour of the move.
Hillary made headlines during her last visit to Pakistan in October 2009 when she suggested that senior officials in Islamabad knew the whereabouts of al Qaeda leaders hiding since the September 11, 2001 attacks on the US.
Hillary has acknowledged Pakistan Prime Minister Yousuf Raza Gilani`s "personal role in efforts to normalise relations with India" and hoped these moves would bear fruit in the near future.
Hillary made the remarks during a meeting with Gilani late last evening, said a statement issued by the Prime Minister`s office.
Gilani said Pakistan wants "good neighbourly relations with India" and would like both sides to "address all issues and disputes between them peacefully".
During his interaction with Hillary, Gilani said the discussions in different sectors as part of the Pakistan-US Strategic Dialogue had prepared the grounds for taking the bilateral relationship beyond the war on terror and American aid provided under the Kerry-Lugar Act.
Referring to the situation in Afghanistan, Gilani said his government attaches great importance to its relations with the neighbouring country and "considers peace and stability in Afghanistan contingent upon a peaceful and secured Pakistan".
Hillary said she saluted the Pakistan government`s resolve to fight terrorism and that the US administration is "fully appreciative of the extraordinary sacrifices made by Pakistan in its war".