WASHINGTON: Saudi Arabia is believed to have arranged the blood money that allowed CIA contractor Raymond Davis to go home after nearly two months in a Lahore jail, diplomatic sources told Dawn.

They said that the Saudis joined the efforts to resolve the dispute late last month after it became obvious that Davis's continued incarceration could do an irreparable damage to US-Pakistan relations.

The Saudis agreed to pay the money, “at least for now”, to get Davis released, the sources said, but did not clarify if and how would the Saudis be reimbursed.

“This is something that needs to be discussed between the United States and the Kingdom,” one source said. “Mr Davis's surprise departure from Pakistan came after it became obvious that the Americans were getting impatient,” he added.

The New York Times, however, quoted US officials as saying that the money would be paid by members of the Pakistan government, and then reimbursed by the Obama administration.

US officials, who spoke to the media, also insisted that the CIA had made no pledges to scale back covert operations in Pakistan to earn Davis's release. The CIA also refused to give the Pakistani government or its intelligence agency a roster of American spies operating in the country, the officials said.

In an interview broadcast on Thursday by the US National Public Radio, Secretary of State Hillary Clinton did not clarify the situation either. “Well, you'll have to ask him what he means by that,” said Ms Clinton when informed that Punjab's Law Minister Rana Sanaullah was insisting that the blood money had been paid.

“And a lawyer involved in the case said it was $2.34 million. There is no money that came from anywhere?” she was asked.

“The United States did not pay any compensation,” the secretary replied. “Did someone else, to your knowledge?”

“You will have to ask whoever you are interested in asking about that,” she said.

“You're not going to talk about it?” the interviewer insisted.

“I have nothing to answer to that,” she replied.

According to the US media, the case was resolved after Pakistani officials met family members of the victims for more than six hours on Wednesday to arrange compensation. The issue of payments was first raised with Pakistani officials by Senator John Kerry during a trip to Islamabad last month.

Since then, American and Pakistani officials had regularly discussed the matter, and CIA director Leon Panetta had spoken frequently to ISI chief Lt-Gen Ahmad Shuja Pasha, the media report said.

At the White House, spokesman Jay Carney referred reporters to the State Department when asked if he knew the blood money had been paid.

At the State Department, deputy spokesman Mark Toner said he would “go with the secretary's statement”.

“I'm not an expert in Pakistani law, so I'm not comfortable discussing the legal process that took place. I understand that they signed a document that then pardoned Mr Davis, and the case is, in our mind, resolved,” he explained.

“I don't think so. No,” said Mr Toner when asked if the US was in direct contact with the victims' family.

“We want to move on now and get to the issues that we're working together with Pakistan on,” said Mr Toner when asked what would be the impact of the release on US-Pakistan relations.