By Katharine Houreld
ISLAMABAD (Reuters) - Pakistan and the United States moved closer to a billion dollar defense deal this week, after U.S. authorities notified Congress of a proposal to supply helicopters and missiles to sharpen up Pakistan's counter-terrorism efforts.
U.S. ally Pakistan, a nuclear-armed nation of 180 million people, is fighting a Taliban insurgency in its northwest, a separatist insurgency along its Iranian border in the west, and has a heavily militarized and disputed border with arch rival India in the east.
The $952 million proposal involves the United States supplying Pakistan with 15 AH-1Z attack helicopters, 1,000 Hellfire missiles, engines, targeting and positioning systems and other equipment. But negotiations are not complete.
The helicopters and weapon systems were designed for counter-terrorism and counter-insurgency operations, especially in the mountainous Taliban strongholds along the Afghan border, the U.S. Defense Security Cooperation Agency said.
On Monday, the agency notified Congress of the proposed sale, noting it would "contribute to the foreign policy and national security of the United States by helping to improve the security of a country vital to U.S. foreign policy and national security goals in South Asia".
The equipment "will not alter the basic military balance in the region," the agency said.
Pakistani defense officials did not reply to requests for comment. The United States has been pushing Pakistan to take action against the Taliban as it withdraws most of its combat troops from neighboring Afghanistan, which is facing its own Taliban insurgency.
James Hardy, the Asia-Pacific editor for IHS Jane's Defence Weekly, told Reuters the helicopters would help modernize Pakistan's aging fleet, some of which had problems with spares and maintenance.
"Attack helicopters give you 'loiter' capability - you can hang around, find the target, knock it out," he said. "Right now Pakistan is using its fast jets for counterinsurgency work."
Pakistan is also trying to finalize a deal to buy eight submarines from China for a reported cost of between $4 billion to $5 billion.
China supplied 51 percent of the weapons Islamabad imported in 2010-2014, according to the Stockholm International Peace Research Institute (SIPRI), which tracks global arms sales.
This year's budget allocated $7 billion to the military. The police received $800 million.
(Reporting by Katharine Houreld; Editing by Nick Macfie)