ISLAMABAD (Agencies) United States Special Envoy for Afghanistan and Pakistan Richard Holbrooke Sunday said sources of funding for terrorists and militants come from outside Pakistan and through extortion of NATO supply convoys. Funding of terrorism is a serious issue and they are being addressing matter, he remarked. Holbrooke, who is in Islamabad to represent his country at the Pakistan Development Forum (PDF), was speaking at a special roundtable discussion arran-ged by Radio Pakistan. He told a questioner that Pakistan and Afghanistan would have to cooperate to resolve the issue of terrorism. If Pakistan wishes to play a role in the process of reconciliation in Afghanistan, it would be welcomed, he added. Holbrooke mentioned that the United States had worked to bridge the trust deficit with Pakistan and the leadership of the two countries had personal rapport. He said his country was working on a transition strategy in Afghanistan by starting a phased withdrawal of troops from the country in July 2011, adding that the process of combat troops withdrawal would be completed in four years. But he stressed that the process was not an exit but a transition strategy. Responding to a question, Holbrooke accepted the fact that the United States committed a mistake by abandoning Pakistan and Afghanistan after Soviet withdrawal from the region in 1989 but it would not repeat the blunder. He asserted that his country wanted to return full sovereignty to the people and the government of Afghanistan. He said President Obama would attend the NATO summit next week in Lisbon where Afghan counterpart Hamid Karzai would also be invited to discuss various issues, adding, The US and other countries, including Pakistan, support the government of President Karzai and Taliban will have to live with the reality. Holbrooke said he would make announcements at the PDF meeting Monday (today) to demonstrate absolute commitment of the US for assistance to Pakistan, adding that his country had so far provided about half a billion worth of aid to Pakistan to enable it coping with the aftermath of the devastating floods. Replying to a query, he said the PDF meeting was not a pledging session but the Friends of Democratic Pakistan (FoDP would listen to the priorities of the government and discuss plans. He said 60 per cent of the 5.3 billion dollars pledges made at the Tokyo moot of the FoDP had been materialised so far. The US diplomat appreciated Pakistans democratic govt for initiating the difficult decision of tabling pieces of legislation in the National Assembly for imposition of flood tax and Reformed General Sales Tax, adding that the world would assist Pakistan in tackling the challenge posed by floods but mobilisation of domestic resources would send a positive signal to the outside world that the country was serious in helping itself. He mentioned the fact that Pakistan was one of the most under-taxed countries in the world and it is obligation of the rich to contribute from their income to mitigate sufferings of the people in distress. Holbrooke said he was personally aware of the enormous sacrifices made by Pakistan Army in the war against terror and that too in difficult terrains like Waziristan, Swat, FATA, Dir and Buner. When asked whether the statement by President Obama to support Indias bid to seek permanent membership of the UN Security Council would be unhelpful in reducing tension between Pakistan and India, he said the United States favoured greater understanding between the two countries. The US leadership has repeatedly stated that the two countries should work out their differences, he pointed, adding, The ability of the United States to talk freely and candidly with both Pakistan and India would help in resolving issues. To a question, Holbrooke said the operation in North Waziristan would be a tactical decision to be made by Pakistans Army and the government. At the moment, Pakistan Army feels that it does not have the resources for the purpose, he added.