The step, an apparent reward for Pakistan's support of the global war on terrorism, comes despite ongoing US concerns about nuclear proliferation conducted by Pakistani scientist Abdul Qadeer Khan.

"I advised the foreign minister this morning that we will also be making a notification to our Congress that will designate Pakistan as a 'major non-NATO ally' for the purposes of our future military to military relations," Powell told a press conference after meeting his counterpart Khurshid Mahmud Kasuri.

The designation means Pakistan will join an elite group of nations, including Japan, Australia, Israel, Egypt, Kuwait, South Korea, Argentina, New Zealand and the Philippines, which are granted significant benefits in the area of foreign aid and defense cooperation.

Major non-NATO allies of the United States are eligible for priority delivery of defense material and the purchase, for instance, of depleted uranium anti-tank rounds.

They can stockpile US military hardware, participate in defense research and development programs, and benefit from a US government loan guarantee program, which backs up loans issued by private banks to finance arms exports.

However, the designation does not afford them the same mutual defense guarantees enjoyed by members of the North Atlantic Treaty Organization (NATO).

Powell is in the Pakistani capital for talks with Kasuri, President Pervez Musharraf and Prime Minister Zafarullah Jamali on the hunt for Al-Qaeda, Khan's nuclear proliferation and peace moves with nuclear rival India.

Shortly after announcing the new designation for Pakistan, Powell said he would be asking Musharraf whether government officials were aware of Khan's sales of nuclear secrets to Iran, Libya and North Korea.

"I think this is a logical and proper question to ask and I am sure that the Pakistani authorities would want it known as well," he said.

Khan, the father of Pakistan's nuclear bomb and a national hero, admitted to the activities last month but was immediately pardoned by Musharraf. Pakistani officials have said repeatedly Khan acted on his own and without Islamabad's knowledge or permission.

Pakistan has become a key US ally since the war on terrorism was launched in the wake of the September 11 attacks. It dropped its support of Afghanistan's Taliban rulers, allowed US troops to use its airbases and intelligence for the campaign to oust the Taliban, and arrested more than 500 Al-Qaeda fugitives.

Islamabad was awarded for its immediate cooperation with the lifting of US sanctions -- which dated back as far as 1990 -- on military cooperation, training, and sales.

Since 2001 the US military has resumed bilateral defence talks with Pakistan, some training and limited hardware sales.

However Pakistan remains thwarted in the pursuit of its top military request, the handover of several F-16 fighter jets it paid for in the late 1980s but whose delivery was blocked under the nuclear-related sanctions.

Powell said in India Tuesday no decision had been made on Pakistan's renewed requests for the F-16s.

"We have to take into consideration any requests that are made of us, but no decision has been made with regard to any particular military package, especially F-16s," Powell said.

It was not immediately clear if Pakistan's prospective new designation would lead to the handover of the F-16s.

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