Washington: The Bush administration is preparing to present US President-elect Barack Obama with a classified strategy review aimed at reversing the gains militants have made in destabilizing Afghanistan and Pakistan.

Reviewing aid: US President-elect Barack Obama. Charles Rex Arbogast / AP

The review contains an array of options, including telling Pakistan’s military that billions of dollars in American aid will depend on the military’s being reconfigured to effectively fight militants.

That proposal amounts to a tacit acknowledgment that roughly $10 billion (Rs49,700 crore) in military aid provided to Pakistan as “reimbursements" for its efforts to root out militant groups has largely been wasted.

The payments have been the source of criticism on Capitol Hill and from independent review groups, which have concluded that Pakistan diverted much of the money to build up its forces against India.

Revamping the aid to the military was part of a three-month study of what has gone wrong in the seven-year war along the Afghanistan- Pakistan border.

“We’ve gone seven long years proclaiming that Pakistan was an ally and that it was doing everything we asked in the war on terror," said one senior official involved in drafting the report. “And the truth is that $10 billion later, they still don’t have the basic capacity for counterinsurgency operations. What we are telling Obama and his people is that has to be reversed."

The drafts prepared for the incoming Obama administration urge a far more regional approach to the problem.

©2008/The New York Times