DAVOS, Switzerland - Prime minister said on Saturday there was “a trust deficit” between Islamabad and Washington as he criticised the resumption of US drone strikes on country’s tribal belt.

Speaking the day after over 100,000 people massed in Karachi to protest the strikes, Yousuf Raza Gilani said they only served to bolster militants.

“Drones are counter-productive. We have very ably isolated militants from the local tribes. When there are drone attacks that creates sympathy for them again,” Gilani told reporters at the Davos forum. “It makes the job of the political leadership and the military very difficult. We have never allowed the drone attacks and we have always maintained that they are unacceptable, illegal and counterproductive.”

Relations between the United States and Pakistan have deteriorated sharply over the last year, with Islamabad furious about the surprise deadly raid on Al Qaeda chief Osama bin Laden’s hideout in Abbottabad last year.

The two sides have also been at loggerheads over a US air strike in November in which 24 Pakistani soldiers were killed.

The US halted drone strikes on Pakistan soil in the immediate aftermath of that strike but they have since resumed.

Gilani said that Pakistan now wanted to agree new rules of engagement with the United States.

“The unilateral action taken in Abbottabad, that was not liked in any quarter ... We need assurances that such a unilateral action will not be repeated in the future. There is a trust deficit.”

He said the Defence Committee of the Cabinet decided to define new terms of engagements and it was decided to cut off the Nato supply lines, get the Shamsi base vacated and boycotted the Bonn Conference.

The prime minister said it was in both countries’ interests to cooperate as partners and Pakistan had paid a high price at the hands of militant groups.

“We want to work together and we are fighting against militants and terrorists. We have paid a huge price for that.”

He said Pakistan had lost over 30,000 civilians and 5,000 military personnel, besides incurring heavy loss at economic front.

To a question, Gilani said under the earlier policy, former president Pervez Musharraf took all decisions without taking the people of Pakistan into confidence.

“If there is no support of the public, no one can win a war,” he said.

Gilani said there was no chance of any military coup in Pakistan, as the army desired democracy and stability in the country.

“I don’t think there will be a coup in Pakistan ever. There is no threat to democracy.”

He said no state institution, military or the people of Pakistan wanted a coup and all were in favour of democracy.

When asked about the presence of Al-Qaeda leader Osama bin Laden in Pakistan, the prime minister said “it was the failure of the intelligence agencies of the whole world.”

To a question about the Swiss hostages in Pakistan, Gilani assured the government was doing all for their safe recovery and said the Swiss ambassador in Pakistan was constantly in touch with the intelligence agencies of the country.

To a question by an Indian journalist that what would happen if there was another Mumbai-like attack, Gilani said “ifs and when do not make a story”.

“We have resumed comprehensive dialogue with India,” he said and mentioned his visit to Mohali to see Cricket World Cup semi-final at the invitation of Prime Minister Manmohan Singh.

“We are in the process of normalising trade relations with India which will benefit the people of both the countries.”

Gilani said Pakistan attached importance to its relations with Afghanistan and a peaceful and stable Afghanistan was in the strategic interest of his country.

“We see Pakistan as a factor of peace, stability and development in the region,” Gilani said.

He said Pakistan desired good relations with all its neighbours. He termed Indian Prime Minister Dr Singh a “genuine person” and said he too was desirous of resolving all issues with Pakistan, including the core issue of Kashmir.

He said Pakistan was actively engaged with its partners in SAARC and ECO for promoting economic cooperation and sharing prosperity among the regional countries.

Gilani pointed to the challenges the country was facing.

“We have to eradicate terrorism, we have to create more jobs for our young people, we have to invest in energy and physical infrastructure and to pay more attention to health and education,” the Prime Minister said and added: “We are facing all these challenges upfront and squarely.”

He said Pakistan today was a functioning democracy with a fully-empowered parliament. “We have a vibrant civil society, free media and an independent judiciary,” he said.

He said under the 18th Constitutional Amendment, the president voluntarily surrendered his powers to the parliament and the federation agreed to transfer resources and responsibilities to the provinces.

He said it could rightly be described as a quiet revolution towards building a strong and prosperous Pakistan.

The prime minister said despite weak international economic outlook, Pakistan’s economy was doing reasonably well.

He mentioned unprecedented floods of 2010 and said these were followed by devastating flood in southern parts of the country in 2011.

“We are confident that with unmatched resilience of our people we shall emerge stronger from these challenges,” Gilani said.

He said Pakistan had friendly relationship with the EU countries which was its largest trading partner and pointed that Pakistan was in the process of concluding five-year engagement plan with the EU.

He said Pakistan was actively engaged with its partners in SAARC and ECO for promoting economic cooperation and sharing prosperity among the regional countries.