(For more on Pakistan, see [nAFPAK])
* Army has "serious concern" about U.S. aid bill
* President says bill does not undermine sovereignty
* Opposition says bill conditions "humiliation" (Adds comment from an opposition leader, analyst)
By Zeeshan Haider
ISLAMABAD, Oct 7 (Reuters) - Pakistan's army on Wednesday expressed "serious concern" about a U.S. aid bill that critics say contains conditions that amount to a humiliating violation of sovereignty as parliament began a debate on the U.S. aid.
President Asif Ali Zardari earlier rejected suggestions that the bill's conditions undermined sovereignty.
The military's rare public criticism of a diplomatic matter raises the possibility of tension with the civilian government which could embolden government critics, an analyst said.
The U.S. Congress last week approved a bill tripling aid for Pakistan to $1.5 billion a year for the next five years and sent it to President Barack Obama for signing into law.
The legislation is part of a bid to build a new relationship with Pakistan that no longer focuses on military ties but on Pakistan's social and economic development.
But in an effort to address U.S. concerns that Pakistan's military may support militant groups, the bill stipulates that U.S. military aid will cease if Pakistan does not help fight "terrorists", including Taliban and al Qaeda members taking sanctuary on the Afghan border.
The bill also seeks Pakistani cooperation to dismantle nuclear supplier networks by offering "relevant information from or direct access to Pakistani nationals associated with such networks", a reference to disgraced nuclear scientist A.Q. Khan who ran a black market in atomic technology.
Pakistan has declined to let foreign investigators question Khan, saying it has passed on all information gleaned from him.
The bill, co-authored by Senators John Kerry and Richard Lugar, also provides for an assessment of how effective the civilian government's control is over the powerful military.
Pakistan's army chief met his top commanders at army headquarters in Rawalpindi and reiterated that Pakistan was a sovereign state and had the right to respond to threats in accordance with its interests, the military said.
"The forum expressed serious concern regarding clauses impacting on national security," the military said.
The military did not elaborate but said it was providing the government with "formal input". It acknowledged it was parliament that would debate the issue and enable the government to respond.
The controversy comes as the United States, Pakistan's biggest aid donor, is pressing the army to expand its operations against Pakistani Taliban fighters to include Afghan Taliban and al Qaeda militants in lawless border enclaves.
Plans by the United States to expand its embassy in Pakistan have also raised suspicion, as has speculation about the embassy's use of private security contractors.
Opposition politicians have criticised Zardari's government for allowing what they call the humiliation of the country.
"There is humiliation for Pakistan on every page of this bill," Chaudhry Nisar Ali Khan, a member of the main opposition party of former prime minister Nawaz Sharif, told parliament.
Prime Minister Yusuf Raza Gilani told the assembly the bill was not binding on Pakistan and he vowed to build a consensus on it.
Supporters of a religious party have staged small protests against the bill. Government critics could take heart from the army's concern, said analyst Hasan Askari Rizvi.
"If the opposition realises the army is really angry they may go to the streets which may cause instability," he said.
Kerry told reporters in Washington on Tuesday that there were no conditions attached to development aid and the bill's conditions on military aid "do not require anything of Pakistan that is not already in the stated policy of the government and opposition parties". [ID:nN06447563]
Parliament was not expected to reject the bill but was likely to pass a resolution highlighting its concerns. (For more Reuters coverage of Afghanistan and Pakistan, see: here) (Additional reporting by Kamran Haider; Editing by Robert Birsel and Sugita Katyal)