NEW YORK: As a diplomatic standoff between Pakistan and the United States festers, Secretary of State Hillary Rodham Clinton warned on Friday that Pakistan risked major instability at home and a hampered war effort in next-door Afghanistan if it didn’t implement reforms and stop fomenting anti-American sentiment.

In a speech at the Asia Society, Ms Clinton said Pakistani cooperation was critical to the success of the fight against Taliban and Al Qaeda extremists in neighbouring Afghanistan. She also said it was “no secret that we have not always seen eye to eye with Pakistan”.

“Pressure from the Pakistani side will help push the Taliban towards the negotiating table and away from Al Qaeda,” she said.

In an intense hour long speech, Ms Clinton urged India and Pakistan to continue their talks which began in Thimphu (Bhutan) which she said augured well for peace in the region.

“Distrust lingers on both sides,” she said. “We need to work together carefully to prevent misunderstandings and disagreements from derailing the progress we have made in the past two years.”

Relations with Pakistan have plummeted to their lowest point in recent years since the arrest of an American citizen in Lahore. The employee, Raymond Davis, shot and killed two Pakistani men he says were trying to rob him on Jan 27.

While reviewing President Barack Obama’s policy for Afghanistan and Pakistan, Ms Clinton stressed that the transition from US to Afghan-led security in Afghanistan would “be formally launched next month, with troop reductions starting in July and continuing based on conditions on the ground. It will be completed by the end of 2014”.

Special representative

She also formally named Marc Grossman, a former US ambassador to Turkey who served in Pakistan early in his career, as the new Special Representative for Afghanistan and Pakistan, replacing Richard Holbrooke who died last December.

Ms Clinton warned Taliban fighters in Afghanistan that they faced a stark choice between war and peace, as US military pressure on them mounted. “They cannot defeat us. And they cannot escape this choice.”

She reiterated America’s three-track strategy in Afghanistan: a military offensive against Al Qaeda and the Taliban; a civilian-led effort to strengthen the Afghan and Pakistani governments, economies and civil societies; and a diplomatic effort to end the Afghan war.

She said the US aimed to bolster an Afghan-led effort to split the Taliban from its Al Qaeda allies and reconcile those willing to renounce violence with the Kabul government.

“In 2001, after 9/11, the Taliban chose to defy the international community and protect Al Qaeda,” she said.

“That was the wrong choice, and they have paid a heavy price. Today, the escalating pressure of our military campaign is sharpening a similar decision for the Taliban: break ties with Al Qaeda, give up your arms and abide by the Afghan constitution and you can rejoin Afghan society; refuse and you will continue to face the consequences of being tied to Al Qaeda as an enemy of the international community.”

US forces are expecting heavy fighting to resume this spring after the annual winter lull.

But Ms Clinton said that the security situation had improved and begun to stabilise, with gains made “at the village level”.

“The momentum of the Taliban insurgents has been blunted and in some places even reversed,” she said.

She said Al Qaeda remained a “serious threat”, but added that the US had given the group’s allies and sympathisers reason to question the value of the alliance.