Washington: A day after a key Congress panel agreed to freeze USD 700 million in aid to Pakistan, the US has said that it was just a proposal under a defence bill and made it clear that it has not cut any civilian assistance to the country, with which its ties have plunged to a new low following a deadly NATO raid.

"Well, first of all, just to clarify what has and hasn't happened here in our understanding. We have not cut USD 700 million in aid to Pakistan," State Department spokesperson Victoria Nuland told reporters at her daily news conference last evening.

The clarification came after a House-Senate Congressional panel agreed to freeze USD 700 million in aid to Islamabad, linking it to Pakistan's efforts to control the spread of Improvised Explosive Devices (IED), as part of a defence authorisation bill.

Nuland's remarks were apparently aimed at allaying concerns of Pakistan, with which the US' ties are currently at unease in the wake of the November 26 NATO air strike that killed 24 Pakistani soldiers.

Pakistan has termed the US Congressional panel's decision as an "unwise" move.

"What we have is something on the defence authorization bill, which is currently moving in the Congress, which would require the Department of Defence to continue providing a strategy on how we will use certain military assistance and measure its progress, in particular on progress that we are making with Pakistan on the IED issue," Nuland said in response to a question.

The negotiating panel of the House of Representatives and the Senate unanimously agreed to freeze the USD 700 million aid to Pakistan pending Pentagon's delivery of a strategy for improving the effectiveness of such assistance and assurances that Pakistan is countering IED networks in the country that are targeting NATO coalition forces.

"If this legislation becomes law, we'll work with the government of Pakistan on how we can fulfill the requirements.

But this requires us to maintain a strategic perspective and to be clear with our Congress about the strategy," Nuland said.

Pakistan is one of the largest recipients of US foreign aid, and the possible aid freeze would form only a small portion of billions of dollars of civil and military assistance it gets each year.

But the freeze could lead to greater cutbacks as demands rise in the US to penalise Islamabad for failing to act against militant groups on its soil, who kill US soldiers in Afghanistan.

Locally made IEDs are the most effective weapons used by terrorists against US and NATO forces in Afghanistan.