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ISLAMABAD (Reuters) - The top U.S. diplomat for South Asia began a series of meetings with Pakistan's leaders on Saturday, with the U.S. ally facing a looming balance of payments crisis as well as rising Islamist militancy.
The visit by Richard Boucher, Assistant Secretary of State for South and Central Asian Affairs, came a month after a diplomatic spat over U.S. ground and air incursions targeting al Qaeda and Taliban militants in Pakistani territory.
Boucher met Rehman Malik, the head of the Interior Ministry, and was expected to hold talks with leaders of the seven-month-old civilian government, including President Asif Ali Zardari and Prime Minister Yousaf Raza Gilani, officials said.
An Interior Ministry statement described the talks as "cordial and friendly."
Zardari was sworn in last month after the resignation of former army chief and U.S. ally Pervez Musharraf in August. His party has led a coalition formed after the defeat of pro-Musharraf parties in a February election.
The new government has maintained the unpopular alliance with the United States but wants to put limits on the scope of U.S. action in Pakistan.
While no U.S. ground troops have intruded since a September 3 commando raid on a village near the Afghan border, missile attacks by pilotless, U.S. drone aircraft have come thick and fast.
Two Arab fighters were among six killed in a missile attack, the eleventh since the beginning of September, that struck the village of Sam in South Waziristan on Thursday.
Boucher's visit also follows a Saudi initiative to engage moderate members of the Taliban in a dialogue that could lead to peace talks, with the aim of isolating the Taliban hardliners and splitting off Taliban support for al Qaeda fighters in the region.
While not directly involved, a spate of comments by U.S. officials and generals have shown greater acceptance of the eventual need for some reconciliation in Afghanistan, given the difficulties defeating an enemy that has mounted more attacks this year than at any time since 2002.
Both U.S. presidential candidates, Barack Obama and John McCain, have said they would boost U.S. troop strength in Afghanistan from current levels of 32,000.
As the end of President George W. Bush's term nears, the political transition could limit Washington's ability to provide direct help for Pakistan to come through a balance of payments crisis that could turn critical in coming weeks.
But multi-lateral lenders based in Washington could be more willing to release funds to Pakistan if they get a clear nod from the United States, analysts say.
Meantime, Pakistan has also asked China, its most-reliable geo-strategic partner, and oil suppliers in the Gulf for help.
Writing by Simon Cameron-Moore; Editing by Charles Dick