US sees limited progress in spy standoff

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WASHINGTON – US national security officials say progress is being made to persuade Pakistan to free a CIA contractor held on murder charges but that Washington could take punitive diplomatic and financial action if the case is not resolved soon.
The officials said they believed private discussions between Islamabad and Washington have cooled anti-American rhetoric that erupted in Pakistan after the arrest of Raymond Davis, a former US Special Forces soldier employed by the CIA as a bodyguard for its operations officers.
His arrest put grave strains on ties between US and Pakistani intelligence agencies, who have had an uneasy but sometimes productive partnership combating militants based in the Tribal Areas. Last week, CIA Director Leon Panetta raised the Davis case with his Pakistani counterpart General Pasha Pasha, head of the Inter-Services Intelligence.
US Secretary of State Hillary Clinton and Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, also talked about Davis with top Pakistani officials. The US message, according to a senior official in Washington, was “turn down the volume” of public discussion about Davis and “work through private channels”.
US officials believe the public uproar in Pakistan over Davis has subsided enough to allow productive dialogue about devising a way to free him. David has been held in Lahore since January after he allegedly shot dead two men who he says were trying to rob him at gunpoint.