U.S. hopes for breakthrough in Pakistan NATO supply route talks By Michael Georgy and Qasim Nauman ISLAMABAD (Reuters) - The United States hopes Pakistan will soon agree to re-open supply routes to NATO troops in Afghanistan, a U.S. official said on Wednesday, after a Senate panel threatened to cut aid to Islamabad over the standoff. Pakistan closed the supply routes, seen as vital to the planned withdrawal of most foreign troops from Afghanistan before the end of 2014, in protest against last November's killing of 24 Pakistani soldiers in a NATO air attack along the Afghan border. "Talks are ongoing and we hope to reach a resolution soon," the U.S. official told Reuters. NATO has been seeking to compensate for the lack of access in Pakistan with shipments of war supplies via Afghanistan's other neighbors, but those routes are more expensive. A Western official said fees for use of the routes which Pakistan is demanding are under discussion in talks currently focused on technical issues. U.S. President Barack Obama said on Monday that he felt the United States and Pakistan were making "diligent progress" on a deal. Obama, who spoke briefly with Pakistani President Asif Ali Zardari on the sidelines of the NATO summit in Chicago, said he told Zardari that Pakistan needed to be part of the solution in Afghanistan. That call for greater Pakistani cooperation has often been made since the country joined the United States' global war on militancy after the September 11, 2001, attacks. But it has grown louder since the United States discovered that Osama bin Laden was living in a Pakistani town and sent special forces there to kill him in May of last year. That unilateral mission and other incidents including the deaths of the Pakistani soldiers have heavily strained ties between Washington and Islamabad. Islamabad often complains that U.S. officials, especially Republican senators and congressmen, advocate a hardline, naive approach to Pakistan which fuels anti-American sentiment and makes cooperation more difficult. A U.S. Senate panel voted cuts in aid to Pakistan on Tuesday and threatened to withhold even more cash if Islamabad did not reopen the routes, reflecting American frustration over the standoff. The Senate panel voted to cut aid to Pakistan by 58 percent in fiscal 2013 from the request by the Obama administration, said the panel's chairman, Senator Patrick Leahy, who like Obama is a Democrat. The panel's spending blueprint must still be approved by the full Senate and the House of Representatives before it can become law. Pakistani officials have denied press reports that Islamabad has been holding up progress in the talks by demanding unreasonably high supply route fees. "These are complex issues under discussion with a range of topics," one of the officials told Reuters. I cannot say if there will be a deal tomorrow, next week or the week after. It will be resolved when it is resolved. Pakistan's unpopular government, always wary of being viewed as an American stooge by the public, may want to drag out the negotiations to appear tough with Washington. Pakistan's Taliban, who are close to al Qaeda and have previously torched trucks carrying NATO supplies, have warned the government against any re-opening of the routes and threatened violence against officials. The country's hardline Islamist political parties have also vowed to do everything possible to prevent supplies from again reaching U.S.-led NATO forces in Afghanistan. Pakistan has demanded an apology over the killing of the soldiers, a move some analysts said backfired. "The problem seems that Pakistan has taken certain positions from which it finds itself very difficult to retract from," said political analyst Talat Masood. The U.S. seems unable, because of the presidential elections and other reasons which are well-known - they find it difficult to oblige (Pakistan). A senior Pakistani government official said the fee issue had been resolved, suggesting the main concern was saving face. The biggest snag is who is going to make the announcement? Which arm of the government is going to be made the fall guy for re-starting the not-at-all-popular NATO supply?" he said. Who is going to be the villain of this drama? Additional reporting by Sheree Sardar and Rebecca Conway; Editing by Nick Macfie