Thousands of Pakistani truck drivers Wednesday prepared to resume key NATO supply convoys into Afghanistan and end a bitter seven-month standoff, after Washington apologised over a botched air raid.

Islamabad agreed to reopen the land routes into its war-torn neighbour after US Secretary of State Hillary Clinton said she was sorry for the deaths of 24 Pakistani soldiers in an air strike in November.

The incident enraged Pakistan, prompting the closure of the supply lines and plunging ties with the US to a new low, after the American raid to kill Osama bin Laden.

As part of the deal, Washington will release about $1.1 billion to the Pakistani military from a US "coalition support fund" designed to reimburse Pakistan for the cost of counter-insurgency operations.

The supply line breakthrough, announced by Clinton after she spoke by telephone with Pakistani Foreign Minister Hina Rabbani Khar, follows months of negotiations.

Islamabad, a key but wary US ally in the fight against Taliban militants, had steadfastly insisted on an apology for the November attack, but Washington had previously only expressed regret.

In the sprawling port city of Karachi on Wednesday, drivers and their helpers were cleaning and polishing hundreds of trucks that have stood idle during the seven-month layoff.

Driver Mohammad Hassan, 45, said he was pleased the NATO supply routes would be resumed.

"We were unemployed for a long time. Many vehicles broke down due to prolonged parking. Now we shall have our livelihood again," he told AFP.

"This job is dangerous, but we have to make a living in the given situation, but hope that government will provide us more protection than before."

The deal drew a swift warning from the Pakistani Taliban that they would attack the supply trucks and kill the drivers if they resumed ferrying supplies to Afghanistan.

The president of the All Pakistan Oil Tankers Owners Association Akram Khan Durrani said the move would be welcome news for his 10,000 drivers and crew, but he urged the government to take action on security.

"The government should issue a regulation under which all NATO supply vehicles have a different colour and are given security cover, so that other vehicles are not attacked by militants and we do our work without any fear," he told AFP.

Durrani said before the ban there were 5,000 oil tankers supplying Afghanistan, but this figure has fallen to 3,000 after many vehicles were dumped or converted to other uses.

The land routes into Afghanistan are vital as the US and its NATO allies withdraw troops and equipment built up in Afghanistan since the 2001 invasion, ahead of a 2014 deadline.

The blockade had forced the United States and its allies to rely on longer, more expensive northern routes through Central Asia, Russia and the Caucasus, costing the US military about $100 million a month, according to the Pentagon.

Initial hopes of a deal on reopening the routes fell apart at a NATO summit in Chicago in May amid reports that Pakistan was demanding huge fees for the thousands of trucks that rumble across the border every year.

Clinton stressed "Pakistan will continue not to charge any transit fee," adding it was "a tangible demonstration of Pakistan's support for a secure, peaceful and prosperous Afghanistan."

The deal was announced just days before a donor meeting on Afghanistan in Tokyo, when Afghan President Hamid Karzai will seek at least $3.9 billion in annual international aid to rebuild the economy.

Clinton is due to attend the Tokyo talks, as some of the international focus now shifts to rebuilding in Afghanistan with almost all foreign combat troops due to withdraw by the end of 2014.

The US commander of NATO-led forces in Afghanistan, General John Allen, who held talks in Islamabad twice in the last six days, praised the deal as "a demonstration of Pakistan's desire to help secure a brighter future for both Afghanistan and the region at large."

While Islamabad had demanded a formal apology for the deaths of its border troops, a US and NATO investigation said the killings were the result of mistakes made on both sides.