US President George W Bush has lifted the sanctions imposed on Pakistan after General Pervez Musharraf's bloodless coup against the elected government of prime minister Nawaz Sharief in 1999.

Bush, in his order on Thursday, said that the waiver would "facilitate the transition to democratic rule in Pakistan; and is important to United States' efforts to respond to, deter, or prevent acts of international terrorism".

Secretary of State Colin Powell, during his visit to Pakistan on March 18, had declared the nation as a major non-North Atlantic Treaty Organisation ally.