The United States president, George W. Bush, has waived sanctions on India and Pakistan as more ships and warplanes head into position for a potential strike on Afghanistan.
The lifting of sanctions, imposed on the two countries in 1998 for their nuclear tests, had been widely expected after Pakistan agreed to cooperate with the United States in its hunt for the suspected terrorist, Osama bin Laden. The Saudi-born militant is Washington's prime suspect in the attacks in last week's hijacked airliner assaults on America.
Bush said the continued sanctions "would not be in the national security interests of the United States."
The move came as an American delegation of military and defence officials headed to Pakistan for consultations on US preparations for a military strike against Afghanistan.
US officials said Bush was also expected to issue an executive order designating specific groups and individuals as "terrorists", in a move designed to lock up their financial assets in the US.
European Union finance ministers meeting in Liege also agreed to speed up ratification of an existing United Nations resolution calling for the freezing of the Taliban's assets.
Afghanistan's Taliban government on Sunday reiterated that it would only hand over bin Laden if evidence of his involvement in the attacks was provided. The Saudi-born militant denies he had a hand in the plot.
"There is no change in our decision," said Abdul Hai Mutamaen, a Taliban spokesman. "American demands are not in favour of Muslims and Afghans and we are not ready to accept this."
The Taliban is finding itself increasingly isolated. The United Arab Emirates, one of the three countries to recognise the hard-line government severed its diplomatic ties with Afghanistan on Saturday.
Bush is due to meet Canadian Prime Minister Jean Chretien on Monday, and to receive the Japanese prime minister, Junichiro Koizumi, the next day in an effort to build an international coalition for the "war on terrorism."
Pope pleads for peace
During his visit to Kazakhstan, Pope John Paul II issued an impassioned appeal that the world should not slide into war following the attacks.
"With all my heart, I beg God to keep the world in peace," said the Pontiff. "We must not let what has happened lead to a deepening of divisions. Religion must never be used as a reason for conflict."
The Pontiff also said all controversies between nations should be resolved by negotiations and dialogue, and by not force of arms.
swissinfo with agencies