Speaking after his meeting with Finance Minister Abdul Hafeez Shaikh, Ruggiero said the contribution demonstrates the commitment of the United States to a comprehensive, long-term partnership with the people and government of Pakistan.

"I'm pleased to be here today to fulfil a pledge made by my former boss and Pakistan's great friend, Special Representative Richard Holbrooke," said Ruggiero, on his first visit to Pakistan since taking up his new post.

"I know that Ambassador Holbrooke would have wanted to make this announcement personally as he was very committed to responding to the needs of the flood victims.

"It will used in a very transparent way... and it will be transferred to needy people," he said.

The compensation fund has been dogged by reports of mismanagement and the World Bank has imposed strict conditions before it backs the scheme, which US officials said must be met before the announced money could be dispersed.

American money for the fund is part of a $500 million accelerated package diverted from a three-year $7.5 billion aid bill agreed in Washington.

Shaikh welcomed the funds and paid tribute to Holbrooke, who died on Dec. 14 after suffering a torn aorta.

"He was a great friend of Pakistan and had a particular passion for helping Pakistani people. This particular initiative was a drive by him to get money quickly into the hands of those flood affected people who need to rebuild their lives," he said.

Catastrophic monsoon rains that swept north to south in July and August affected 21 million people, consumed entire villages, wiped out agricultural land and destroyed industries in the country's worst ever natural disaster.

— with input from agencies