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The US will support Indo-Pak dialogue to find joint solutions to counter terrorism and to promote regional stability but will leave it to the two countries to chart their own course of action, a key Obama administration for South Asia said on Thursday.

“India and Pakistan face a common challenge and we will support continuing dialogue to find joint solutions to counter terrorism and to promote regular stability,” Robert O. Blake, assistant secretary of state for South and Central Asia, told US lawmakers at a Congressional hearing. The recent Singh Zardari meeting, he said, was encouraging.

Earlier in Pakistan, US national security adviser James Jones said the Obama administration will help in “every possible way” to settle the Kashmir problem and to resume the stalled Indo-Pak dialogue. Responding to Islamabad’s request for assistance in resolving the “core issue” with New Delhi, he said, “The US would help in every possible way for the resumption of dialogue between Pakistan and India for resolution of the Kashmir dispute and water distribution.”

The US Senate on last Wednesday approved a bill to triple civilian US aid to Pakistan, a bid to cement a long-term partnership and defeat Islamist fighters threatening the nuclear-armed ally’s stability. Legislators unanimously approved the plan.

The package provides $7.5 billion in humanitarian and economic aid over five years, recommends that level for another five years, while trying the United States military aid to progress against extremists. “This legislation marks an important step towards sustained economic and political cooperation with Pakistan,” said Senator Richard Lugar, the top Republican on the Senate Foreign Relations Committee.

The House of Representative passed its version of the legislation in mid-June and the two chambers must work out and approve a compromise bill before President Barack Obama can sign the measure into the law.

“Pakistan is facing a critical moment,” said Democratic Senator John Kerry, the chairman of the Senate Foreign Relations Committee, after legislators agreed to approve it without dissent.

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Iraq’s Prime Minister Nuri al-Maliki declared victory on Saturday as the country began to end a foreign occupation with the withdrawl of US combat troops from cities, and told Iraqis not to lose faith if the pullback resulted in attacks. As part of a security pact signed between Baghdad and Washington last year, US combat forces must leave urban centres by June 30 and the entire force that invaded Iraq in 2003 must be gone by 2012.

“It is a great victory for Iraqis that we are taking the first step towards ending the foreign presence in Iraq,” Mr Maliki told a conference of leaders from the ethnic Turkmen community.

“I, and you, are sure that many don’t want us to succeed and celebrate this victory. They are getting themselves ready to move in the dark to destabilise the situation, but we will be ready for them, God willing.” A series of devastating bomb attacks in April cast doubt on the ability of Iraqi security forces to take over from US troops in protecting the population from mainly Sunni Islamist insurgents, including Al-Qaeda, and other violent groups.

Police officers used tear gas and water cannons to beat back thousands of demonstrators gathering in the capital on Saturday, a day after Iran’s supreme leader Ayatollah Ali Khamenei said there would be “bloodshed” if street protests continued over the disputed presidential election.

State television reported that two people had been wounded when a suicide bomber blew himself up at the Tehran shrine of Ayatollah Ruhollah Khomeini in the southern part of the city, several miles from the scheduled protests. The report of the blast could not be independently confirmed.

The violence unfolded on a day of extraordinary tension across Iran, as opposition protesters swore to continue pressing their claims of a stolen election against Iran’s embattled and increasingly impatient clerical leadership. Iran’s divisions played out on the streets. Regular security forces stood back and calmly urged protesters to go home and avoid bloodshed, while the feared pro-government militia, the Basij, beat protesters with clubs and electric prods.

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India and Nepal on Sunday agreed to set up a high-level bilateral mechanism to resolve the border issues between the two neighbours. The move to set up the bilateral mechanism was decided during the meeting between visiting Indian Foreign Secretary Shivashanker Menon and the new Nepalese Prime Minister Madhav Kumar Nepal, at which they also reflected on the current political situation in the country.

Menon, making his second visit to Nepal in the last four months, also extended an invitation to the Prime Minister to visit India, dates for which are being worked out. By setting up a bilateral mechanism on border issues, the two countries hope to take out the sting from a campaign being run by the former ruling Maoists party, which has alleged that India has encroached upon Nepalese territories in Dang district.

Earlier, on his arrival, Mr Menon faced protests at the Kathmandu airport by youths alleging India had occupied Nepal’s territory. Nepal police said about seven to eight young men, seemingly students, tried to show the visiting envoy black flags as he alighted at the Tribhuvan International Airport in Kathmandu. However, police broke up the protest and arrested four of the protesters. “It is a non-political protest,” the Gaushala police station incharge told.