WASHINGTON (Agencies) President Barack Obama is less upbeat about Pakistan, citing continued US-Pakistan strains over the American raid that killed Osama bin Laden in Abbottabad on May 2. Obama made his declaration in a letter to congressional leaders Friday. The letter accompanied a semiannual report assessing the administrations policy towards Afghanistan and Pakistan. The report also addresses continued political instability in Pakistan that has confounded efforts to undertake economic reforms. US contributions to Pakistans counterinsurgency and counterterrorism efforts decreased because of reductions in the US military presence in Pakistan at the request of the Islamabad government, the report said. There is no mention of the links that US official have alleged between Pakistan intelligence and the Haqqani insurgent network. But the report contains two classified annexes that were not made public. Insurgent activity and high-profile strikes against security and government forces contributed to a decline in the security situation, the report stated. Citing huge challenges ahead, Obama said he still intends to withdraw 33,000 troops from Afghanistan by next year and added that the administrations strategy for winding down the war remains unchanged. The letter reports improvement in the fight against Al Qaeda, as well as a reversal in the Talibans momentum in Afghanistan and headway in the training of Afghan security forces. Huge challenges remain, and this is the beginning - but not the end - of our effort to wind down this war, Obama wrote. The 33,000 troops represent the force surge Obama announced in December 2009. Last June, he announced the withdrawal of 10,000 US troops from Afghanistan by the end of this year and that the 33,000 surge troops would leave Afghanistan by the summer of 2012. In his letter, Obama said that plan was still on track. Meanwhile, US Secretary of State Hillary Clinton said: We are pressing and pushing on every lever that we have in the relationship, and we have to be effective in trying to achieve our strategic goal, which is to prevent any attacks against us emanating from Pakistan, as well as to try to help stabilise Pakistan against this internal threat, and to create the best possible circumstances for Afghanistan to be able to have control over its own future, Hillary said. Those are all extremely difficult and we are learning it, each piece of that, every single day, she said in response to a question after she delivered her remarks at the Kumpuris Distinguished Lecture Series here. Hillary said Pakistani people are trying to navigate through a very difficult security environment. Referring to the support US provided to the insurgent groups during the fight against the Russians in Afghanistan, Hillary said when she meets Pakistani officials, they rightly say, Youre the ones who told us to cooperate with these people. Youre the ones who funded them. Youre the ones who equipped them. Youre the ones who used them to bring down the Soviet Union by driving them out of Afghanistan. And we are now both in a situation that is highly complex and difficult to extricate ourselves from. That is how they see it, she noted. They also have used groups in the past to support their ongoing conflict with India over Kashmir. And when I became Secretary of State, they were trying to basically appease the Pakistani Taliban who were attacking them. So they were trying to draw a distinction between the good terrorists and the bad terrorists, because we had funded the good terrorists together. So they were dealing with this network of terrorism that had been better organised and directed because of Al Qaeda, which brought a lot more funding into the border area between Afghanistan and Pakistan and much more of a sense of mission, because (Osama) bin Laden and those who worked with him had a very highly developed idea about how to inflict damage on the United States and others, Hillary said. So, one of the US first rounds of discussions with the Pakistanis was how it was not in their interest to permit terrorists to take over territory, something they thought would appease them, which obviously did not and could not, she said. So they began moving troops off their Indian border. They began going after the Pakistani Taliban. So I think its important that we appreciate their perspective about where we both are right now. That in no way excuses the fact that they are making a serious, grievous, strategic error supporting these groups, because you think that you can keep a wild animal in the backyard and it will only go after your neighbour? We have too many stories where that dont turn out like that, Hillary said.