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Washington’s new special envoy to Pakistan and Afghanistan, Marc Grossman (second right), introduces his delegation to Prime Minister Yousuf Raza Gilani at the PM’s residence in Islamabad on Monday. Image Credit: AFP

Islamabad: The new US special envoy to Afghanistan and Pakistan met Pakistani Prime Minister Yousuf Raza Gilani here on Monday during his first trip to the region since taking the position held by the late Richard Holbrooke.

US-Pakistani relations are at a low point because of a dispute over an American CIA contractor who shot dead two Pakistani men.

Washington says the man, Raymond Allen Davis, has diplomatic immunity and acted in self-defence against robbers.

Pakistan has resisted releasing him, saying the matter is up to the courts.

The US Embassy said envoy Marc Grossman, who was appointed to the post in February, met late on Sunday with Pakistan's finance minister, Abdul Hafeez Shaikh.

Resistance to reforms

Pakistan's economy is struggling and the United States has offered aid and advice to shore it up.

But the ruling Pakistan People's Party has had a hard time persuading even some of its allies to go along with economic reforms demanded by international lenders, such as a new sales tax.

Gilani told reporters before his meeting with Grossman that the government was properly handling the Davis case.

"We are a responsible government and will not do anything which is in contrast with the national interest," Gilani said.

Grossman was also due to meet with President Asif Ali Zardari and other top officials, said Alberto Rodriguez, spokesman for the US Embassy in Islamabad. Grossman previously served as the State Department's third-ranking diplomat under President George W. Bush and was an ambassador to Turkey.

Grossman retired from the foreign service in 2005, later working for the Cohen Group, a consulting firm run by former Defence Secretary William Cohen.

Holbrooke, who died in December of a ruptured aorta, was in charge of a broad policy review that led to changes in priorities in dealing with insurgencies in the two countries and hopes for improved cooperation.

The Davis case has been a major setback to cooperation between Pakistan and the United States, and it likely will figure in Grossman's talks with Pakistan leaders.