U.S. denies paid compensation over Pakistan killings

Policemen stand guard as a vehicle transporting consulate officials leave Kot Lakhpat jail after they attended the trial of Raymond Davis in Lahore March 16, 2011.

CAIRO (Reuters) - The United States did not pay compensation to the families of two Pakistanis killed by a CIA contractor who was acquitted of their murder on Wednesday, Secretary of State Hillary Clinton said.

The contractor, Raymond Davis, 36, was acquitted and released by a Pakistani court after a deal to pay "blood money" to the victims' families, Punjab Law Minister Rana Sanaullah told Reuters earlier on Wednesday.

Clinton told reporters in Cairo: "The United States did not pay any compensation." Asked who did, she replied: "You will have to ask the families."

She also refused to say if the Pakistani government had paid, saying: "You will have to ask the Pakistani government."

Earlier, Clinton expressed gratitude that the families had allowed Davis to leave Pakistan.

"The families of the victims of the January 27th incident pardoned Mr Davis and we are very grateful for their decision. We appreciate the actions that they took that enabled Mr. Davis to leave Pakistan and head back home," she added.

Davis shot dead the two Pakistanis in the eastern city of Lahore after what he described as an attempted armed robbery. He said he acted in self defense.

The case caused a long diplomatic standoff between Pakistan and the United States, which said Davis had diplomatic immunity and should have been immediately repatriated.

"We have communicated our strong support for the relationship between Pakistan and the United States which we consider to be of strategic importance and are looking forward to continuing to strengthen it based on mutual respect and common interest, " Clinton said.

Powerful religious parties in Pakistan condemned the release and analysts said there was a risk of a backlash against the government.

(Reporting by Arshad Mohammed; Editing by Barry Moody)