WASHINGTON: In a move dubbed by the media as “a new year gift to Pakistan”, US President Barack Obama has signed into law a bill that could suspend a large chunk of the $1.1 billion military aid to the country.

The suspension is part of a massive $662 billion defence spending bill which President Obama signed on Saturday evening despite having “serious reservations” about some of its provisions.

“The fact that I support this bill as a whole does not mean I agree with everything in it,” Mr Obama said in a statement issued by his office. “Provisions in this bill could interfere with my constitutional foreign affairs powers.”

Mr Obama said he signed the bill chiefly because it authorises funding for the defence of the United States and its interests abroad and for vital national security programmes.

“As Chief Executive and Commander-in-Chief, (I) will oppose any attempt to extend or expand them in the future, and will seek the repeal of any provisions that undermine the policies and values that have guided my administration throughout mytime in office,” he said.

But there seems to be a bilateral consensus in the US Congress over the provision that seeks to suspend up to $850 million from the Pakistan Counter-Insurgency Fund.

The fund, however, can be released if Secretaries of State and Defence report to Congress that Islamabad is making progress in the war on terror and is cooperating with the US in curtailing the use of improvised explosive devices in Afghanistan.

IEDs are manufactured from fertilisers produced in Pakistan and smuggled to Afghanistan and are one of the major factors responsible for the death of American troops in that country.

In his comments on the bill, President Obama also cited limits on transferring detainees from the US base at Guantanamo Bay, Cuba, and requirements he notify Congress before sharing some defence missile information with Russia as problematic.

The bill, approved by Congress last week after its language was revised, also slaps new sanctions on Iran aimed at reducing its oil revenues but gives the US president powers to waive penalties as required.

This provision could also affect Islamabad’s effort to build the Iran-Pakistan gas pipeline as it places new restrictions on dealing with Iran’s central bank.

The US wants Pakistan to explore alternative routes, such as building a pipeline from Turkmenistan, to meet its gas needs.

Pakistan fears that the situation in Afghanistan does not allow an early construction of this pipeline while its needs are urgent as its own gas reserves have been shrinking fast, leading to widespread gas shortages affecting its industry and daily life.