As the US Congress agreed to freeze close to $700 million in aid to Pakistan, the Obama administration sought to assure its estranged ally that the legislation merely includes a reporting requirement and that too could be waived. The freeze provision is part of a giant $662 billion defence budget for fiscal 2012 passed by US Senate by 86-13 votes Thursday, a day after the US House of Representatives approved it by 283-136 votes. It will now be sent to President Barack Obama, who has said he would reluctantly sign it after months of fighting over the handling of suspected terrorists, especially those who are US citizens. The bill, which also places sanctions on Iran, calls for a hold on 60 per cent of Pakistan Counterinsurgency Fund over the issue of Pakistan failing to act against the flow of improvised explosive devices (IEDs), and raw materials for bombs. The bill requires that the Secretary of Defence submit a report "that would include a strategy for enhancing Pakistan's efforts to counter improvised explosive devices (IED) and information on whether Pakistan is making significant efforts to implement a strategy to counter IEDs." However, the State Department sought to downplay the Congress' move by suggesting that the legislation does not actually cut $700 million in military aid to Pakistan. Rather, it includes a reporting requirement. "What this piece of legislation requires is that the Administration make certain certifications as to how our general relationship with Pakistan is going in certain categories in order to release the money, but this is not about cutting funding or freezing funding," spokesperson Victoria Nuland told reporters Thursday. "In addition, I would say that they usually include some kind of waiver authorities for the Secretary," she said stressing the certifications are to be made by the US administration and "are not responsibilities of the Government of Pakistan." The aid freeze move is seen as being linked with Pakistan's sharp reaction to last month's NATO attacks that killed 24 Pakistani soldiers. The US, Nuland said, has been in constant and intense dialogue with Pakistan over the Nov 26 incident that prompted Islamabad to shut down NATO supplies and review cooperation with the US. "We understand their concern. Frankly, there is plenty of concern on the American side as well," she said. Congressmen and Pentagon official says that the raw materials for these IEDs come from Pakistan, in particular its fertilisers factories, and Pakistan is not taking enough steps to curb their flow into Afghanistan, which is being used by the Taliban and other extremist groups against US-led international forces there. The bill in its final form as passed by both the House and the Senate, limits the amount of funds available for the Pakistan Counterinsurgency Fund (PCF) until the Secretary of Defense provides Congress a strategy on the use of the PCF and on enhancing Pakistan's efforts to counter the threat of IEDs. "As to Pakistan, the conference report limits to 40 per cent the amount of the Pakistan Counterinsurgency Fund that can be obligated until the Secretary of Defense provides Congress a strategy on the use of the Fund and on enhancing Pakistan's efforts to counter the threat of improvised explosive devices (IEDs)," said Senator Carl Levin, Chairman of the Senate Armed Services Committee, on the Senate floor.