US Deputy Ambassador Richard Hoagland and Additional Secretary Defense Rear Admiral Farrukh Ahmed signed the agreement on transit of cargo for NATO-led troops based in Afghanistan on Tuesday in Rawalpindi.
The prior arrangement between the two governments was reportedly based on a verbal understanding. The MoU runs through 2015 and can be renewed subsequently.
The agreement allows Pakistan to inspect the cargo and bar transport of lethal equipments. Under the agreement the US is only allowed to supply weapons and not ammunition for the Afghan National Army.
The US will also release USD 1 billion under the Coalition Support Fund to compensate Pakistan for fighting insurgency on its territory.
The MoU would contribute to regional stability, hoped Pakistan’s Defense Secretary Asif Yasin Malik.