The U.S. State Department Monday described Pakistan's President Pervez Musharraf's decision not to step down as the head of his country's army as a lack of move toward democracy.

But in the same statement, the department's spokesman Richard Boucher rejected Pakistani opposition leader and former prime Minister Benazir Bhutto's suggestion that Washington should react more strongly to Musharraf's retention of both the posts, that of the army chief and the president. We write our own statements, said Boucher when reminded of Bhutto's remarks.

The two remarks represent the dilemma that the United States confronts while balancing its strategic interests with the need for democracy in Pakistan.

Musharraf came to power in October 1999, toppling an elected but unpopular government of another former prime minister, Nawaz Sharif. He later forced Sharif to seek asylum in Saudi Arabia and pledged to try Bhutto, who was already in exile, for corruption if she returned.

This turned Musharraf into an international pariah, shunned by all major world leaders and ousted by the commonwealth of the former British colonies.

Musharraf's fortunes changes after the Sept. 11, 2001, attacks in the United States when he decided to abandon Pakistan's former Taliban allies and join the U.S.-led war against terror.

Since then, he has played a key role, arresting more than 500 al-Qaida suspects, so far the largest number caught by any country, and turning them over to the United States.

In his news conference earlier Monday, President George W. Bush also praised Musharraf's efforts to fight al-Qaida, saying: And I appreciate the work of President Musharraf. He came the other day, on a Saturday morning to the White House, and it was an opportunity to thank him once again for some of the bold steps he's taken.

During Musharraf's visit to Washington two weeks ago, Bush called him a world leader and recalled that al-Qaida already made several attempts to kill him.

But Monday's praise came hours after Musharraf announced in a television interview in Islamabad that he was not going to fulfill a pledge he made to the Pakistani opposition parties of stepping down as the army chief on Dec. 13.

Musharraf said an overwhelming majority of Pakistanis want him to remain as chief of the country's powerful military and urged Pakistan's religious leaders not to interfere in politics.

On Monday, about 4,000 workers of a religious alliance called the Muttahid Majlis-e-Amal marched in the Pakistani capital, Islamabad, chanting slogans against Musharraf.

If he (Musharraf) does not remove his uniform by the 1st of January, then on that day we will observe Black Day throughout the country, said the MMA chief Qazi Hussain Ahmed while addressing the rally.

The MMA is also opposed to Pakistan's alliance with the United States and recent moves to improve ties with nuclear rival India, demands that worry Washington.

Policymakers in Washington fear that any political movement at this stage can easily be turned into an anti-American uprising by the MMA and other religious groups. This situation forces them to continue to support Musharraf despite the Bush administration's professed desire to encourage democracy in the Muslim world.

This dilemma also reflects in the State Department's approach to the issue of democracy in Pakistan.

Although supporting the demand for elections in Pakistan, Boucher also indirectly endorsed the Musharraf government's plan for holding elections in 2007 and not before as demanded by the opposition.

We intend to continue to support the electoral process, which is currently scheduled to culminate in national elections in 2007, the spokesman said.

The United States, he said, would like to see an election that meets international standards and includes the full participation of all political parties. So that's the goal that we'll continue to work toward.

Boucher said U.S. Secretary of State Colin Powell had discussed this issue with Musharraf when he visited Washington two weeks ago.

The secretary ... also heard an explanation of the actions (of the Pakistani) Parliament and Musharraf explained, he himself was considering what to do about his status in the military.

We do expect to see continuing progress towards this goal, which is central to Pakistan's becoming a modern and moderate nation.

He said since democracy involves more than elections, the Bush administration hopes to see Pakistan strengthen its institutions, particularly its judiciary and its parliament.

He disagreed with a reporter who suggested that the United States was soft-pedaling on the issue of democracy because of Pakistan's support in the war against terror.

I don't think in any way we've ever soft-pedaled our support for democracy in Pakistan. I think we've consistently supported it, in our public statements, in our private discussions with the Pakistani leaders, including directly with President Musharraf, said Boucher.

Asked if Musharraf's statement was a move toward democracy, the spokesman said, This is lack of move, not move.

And when asked if Powell had urged Musharraf to quit the army when he met him, Boucher said, The secretary asked about the question and received an explanation by President Musharraf as far as pros and cons of the issues involved.

The secretary, he said, made clear in that it was important for Pakistan to maintain progress towards democracy and the United States continues to support this objective.

When a reported suggested that Musharraf's actions had hurt democracy in Pakistan, Boucher said, I'm not going to try to analyze this particular step, or lack of step, as we discussed it.

There are different factors involved. We've heard about them from the Pakistanis, heard about them from President Musharraf. I think what is important is the long-term horizon and the ability to continue to move towards that horizon. We have seen Pakistan move in the right direction. We'll continue to encourage that progress.