ISLAMABAD (Agencies) Aides to President Asif Zardari expressed confidence Wednesday that Islamabad and Washington could amicably resolve a growing diplomatic crisis over the fate of a former US Special Forces soldier held for killing two Pakistanis. None, however, would directly respond to statements from Washington that billions of dollars in US aid to Pakistan could be threatened and diplomatic contacts curbed if the American is not released quickly. On Tuesday, US officials said the Obama administration had suspended some high-level contacts with Pakistan and may downgrade the status of a meeting in Washington later this month because of the Davis case. Two top Republicans on the House Armed Services Committee said US aid to Pakistan is in jeopardy if the American is not released. But Pakistani officials insisted Wednesday the situation could be resolved through proper diplomatic channels. Pakistan and the US are strategic partners and we expect to work out our differences on this matter, said Farahnaz Ispahani, an aide to President Asif Zardari. Presidential spokesman Farhatullah Babar echoed that sentiment, but also said the length of time its taking for the Foreign Ministry to decide if Davis has immunity suggests it is not really a case of just black and white. A senior US official said Davis was authorized by the United States to carry a weapon, but that it was a grey area whether Pakistani law permitted him to do so. According to records from the Pentagon, Davis is a former Special Forces soldier who left the army in August 2003 after 10 years of service. A Virginia native, he served with infantry divisions prior to joining the 3rd Special Forces Group in Fort Bragg, North Carolina. In 1994, he was part of the UN peacekeeping force in Macedonia. His record includes several awards and medals, including for good conduct. Public records also show Davis runs a company with his wife registered in Las Vegas called Hyperion Protective Services, though it was not immediately clear whether the company has had many contracts with the US government. The U.S. Embassy in Islamabad has not revealed exactly what sort of work Davis did for them or what he was doing in Lahore. However, the Embassy says he has a diplomatic passport and a visa valid through June 2012. It also said in a recent statement that the US had notified the Pakistani government of Davis assignment more than a year ago.