Washington (CNN) -- The Obama administration is putting the final touches on a security assistance package totaling as much as $2 billion over five years to help Pakistan fight extremists on its border with Afghanistan, senior U.S. officials and diplomatic sources tell CNN.
The aid is expected to be announced later this week when Pakistani officials are in Washington to hold high-level talks.
The package aims to address Pakistan's insistence it does not have the capability to go after terrorists, and needs more support from the United States, the sources said. The aid will help the Pakistanis purchase helicopters, weapons systems and equipment to intercept communications. (read enough yet?)
Osama bin Laden 'living comfortably in Pakistan'
Osama bin Laden is alive and well and living comfortably in a house in the north-west of Pakistan protected by local people and elements of the country's intelligence services, according to a senior Nato official.
By Rob Crilly in Islamabad
Published: 1:10PM BST 18 Oct 2010 Telegraph
The latest assessment contradicts the belief that the al-Qaeda leader is roughing it in underground bunkers as he dodged CIA drones hunting him from the air.
"Nobody in al-Qaeda is living in a cave," according to an unnamed Nato official quoted by CNN.
He added that Ayman al-Zawahiri, bin Laden's second in command, was also living in a house close by somewhere in the country's mountainous border regions.
Pakistani officials on Monday repeated their long standing denials that the Saudi-born terrorist mastermind was being given safe haven.
However, the Nato official said bin Laden was thought to have ranged from the mountainous Chitral area near the Chinese border, to the Kurram Valley which borders Afghanistan's Tora Bora, one of the Taliban strongholds during the US invasion in 2001.
North Waziristan, in particular, has become a nexus for Afghan, Pakistani and Arab militants as they plot attacks against Nato forces across the border in Afghanistan.
Earlier this month a leaked White House report accused its ally Pakistan of playing a double game by avoiding "military engagements that would put it in direct conflict with Afghan Taliban or al-Qaeda forces in North Waziristan".
A senior Pakistani security official denied that bin Laden was being protected and said the latest allegations were designed to heap pressure on Islamabad ahead of talks in Washington this week that would focus on strengthening co-operation between the two countries.
"Every time something important is happening then things like this keep creeping out," he said. "If it's not bin Laden it's something else."