Pakistan Foreign Minister Khursheed Kasuri, right, and his Australian counterpart Alexander Downer enjoy a light moment during a press conference in Canberra
Pakistan and Australia plan to step cooperation in the fight against terrorism. The foreign ministers of the two countries say they expect their leaders to sign a counter-terrorism accord next month that would allow more information to be shared between security and intelligence agencies.

Australia and Pakistan are hoping that a memorandum of understanding on counter-terrorism will be signed when President Pervez Musharraf arrives in Canberra next month.

The announcement was made after a meeting in the Australian capital between the foreign ministers of these two allies in the U.S.-led efforts to fight terrorism.

Australian foreign minister Alexander Downer says his government hopes closer security ties with Islamabad will improve efforts to combat the al-Qaida terrorist network and its affiliates in Southeast Asia, including Jemaah Islamiah. Members of the radical Islamic group were responsible for the Bali bombings two-and-one-half years ago, in which 88 Australians were killed.

Mr. Downer's counterpart, Khursheed Kasuri, is the first Pakistani foreign minister to visit Australia in half a century.

Mr. Kasuri says Pakistan is co-operating with about 50 countries on counter-terrorism and he thought Australia would be another effective ally.

"We think that this would be very helpful doing this with Australia because strategically situated as it is in [the] Pacific but also closely interacting with nations in north-east and south-east Asia. So this should be very useful," he said.

Pakistan remains at the frontline of the war on terrorism. Many western and Pakistani intelligence analysts say al-Qaida leader Osama bin Laden may be hiding in remote areas along the northern border with Afghanistan.

The Pakistani military is carrying out operations along the border with Afghanistan in an attempt to drive out al-Qaida terrorists and their supporters.

Australian Foreign Minister Alexander Downer says that Pakistan is waging a decisive campaign against the extremists.

"We have been very impressed with the work that President Musharraf and his government have done in the war against terrorism," he said.

It also emerged during the news conference in Canberra that a senior al-Qaida figure arrested in Pakistan would not be handed over to the United States just yet.

Abu Faraj al-Libbi is alleged to be the mastermind of two attempts to kill President Musharraf in December 2003, and a bid to assassinate the country's prime minister last year.

Asked if al-Libbi would be handed over to the United States, Pakistan's foreign minister said his government had very good reasons for holding on to such a prized prisoner for now.

Pakistan says it has detained about 700 al-Qaida suspects. Most have been handed over to U.S. custody.