WASHINGTON, 14 February - Pakistani President Pervez Musharraf yesterday won a pledge of debt relief from US President George W. Bush. Bush also praised Musharraf as a friend and visionary during a joint news conference after their hour-long talks at the White House.

But the Pakistani president failed to earn sweeping arms and trade benefits as a reward for his country's help in the war on terrorism. "President Musharraf is a leader with great courage and vision, and his nation is a key partner in the global coalition against terror," Bush said.

Bush sidestepped a call by Musharraf for US mediation in the Kashmir dispute - but said Washington would facilitate talks on the issue between Pakistan and India. "The only way this issue is going to be solved is if the Pakistani government and the Indian government sit down and have serious, meaningful dialogue. So the best thing our government can do is ... come to the table and start to have meaningful, real dialogue, and that's what we'll continue to press for," Bush said.

The administration was expected to propose forgiving up to $1 billion of the $3 billion Pakistan owes to US lenders. "We want to help facilitate the president's concerns about a debt burden on Pakistan," Bush said. He said the United States would include assistance for Pakistan in its budget for 2003. The United States has released $600 million in aid to its new friend and helped Pakistan secure a long-term $1.31 billion loan facility from the International Monetary Fund.

Before the talks, White House spokesman Ari Fleischer said the two leaders would also discuss America's wish to see a democratic government restored in Pakistan. Musharraf seized power in a 1999 coup, but has promised to hold local and national elections in October.

"Opportunities for the future development of our relationship are immense," Maleeha Lodhi, Pakistan's ambassador to the US, said over the weekend.