WASHINGTON, Dec 4: Pakistan President Pervez Musharraf said on Saturday that he discussed with US President George W. Bush a potential purchase of US F-16 fighter jets to upgrade the defence capability of his country. "We discussed the F-16 issue," Gen Musharraf told reporters outside the White House after his meeting with the US leader.

"That is all I would like to say, thank you," he added when asked about the prospective US sale of the fighter jets.

A senior United States administration official said on condition of anonymity that "there is nothing to announce on" the F-16s.

Pakistan reportedly wants to buy up to 25 of the F-16s, which cost around 25 million dollars each, by mid-2005 to add another squadron of such planes to the nuclear-armed nation's existing fleet.

The US Senate late Saturday approved a 388-billion-dollar budget which includes military aid to Pakistan and its war-torn neighbour Afghanistan.

The allocation of 300 million dollars for Pakistan is to designed to bolster the capabilities of its armed forces in hunting down suspected Al Qaeda members along the Afghan-Pakistani border.

The military aid approval follows notification by US defence officials of a possible 1.3-billion-dollar arms package for Pakistan.

It would be the largest US foreign military sale to Pakistan since sanctions against Islamabad were lifted in late 2001 as a reward for supporting US forces fighting Taliban and Al Qaeda forces in Afghanistan.

PEACE PROCESS: He said talks with India to resolve Kashmir dispute "was moving well" and that he was "very optimistic of the future" on bilateral ties.

Gen Musharraf said he hoped that the two neighbours would "move forward" in resolution of all disputes.

"We are moving well on the issue of confidence building measures. And also the dialogue process towards resolution of disputes," said Gen Musharraf.-AFP