Washington ? Pakistani President Pervez Musharraf, meeting with President Bush, said Wednesday he’s “reasonably sure” that kidnapped Wall Street Journal reporter Daniel Pearl is alive. Musharraf suggested the kidnapping may have been in response to his own crackdown on Islamic militants.

“We are not deterred. These kinds of things were expected,” Musharraf said at a White House news conference with Bush.

Bush said the two leaders discussed Pearl’s kidnapping in their Oval Office meeting and share a “mutual desire that Mr. Pearl return home safely.”

Musharraf was asked whether Pearl, who was kidnapped last month, was alive or dead. “I am reasonably sure he’s alive and I really very much hope we all hope that he is alive,” Musharraf said.

“About getting him released, well let me say we are as close as possible to getting him released,” he added.

Musharraf noted that his own actions in arresting Islamic militants in his country and supporting the U.S. war against terror had created a backlash. “I had expected a certain degree of fallout to these steps.”

Bush welcomed Musharraf to the White House and thanked him for his support of the military campaign in neighboring Afghanistan.

“His nation is a key partner in the global coalition against terror,” Bush said. He said Pakistan’s support had proved critical in toppling the Taliban government and routing the al-Qaida terror network in Afghanistan.

He praised Musharraf for aggressively going after Islamic militants in his own country.

Bush and Musharraf spoke with reporters while standing in a hallway in front of a stand of U.S. and Pakistani flags.

“Together our nations will continue to cooperate against terror and trafficking in drugs,” Bush said.

He also suggested his administration stands ready, if asked, to help calm tensions in disputed Kashmir.

For his part, Musharraf said that relations between the two countries have been “friendly, multifaceted and enduring” for more than half a century. Events since Sept. 11 “have demonstrated the depth and strength of this relationship.”

He said Pakistan would “continue to fulfill our responsibilities” for its part in the war against terrorism.

Bush was asked whether he was anticipating military action against Iraq. “I will reserve whatever options I have,” he said. “I’ll keep them close to my vest. Saddam Hussein needs to understand I’m serious about protecting my country.”

“I’ll keep all options available if they don’t make the choice.”

Bush has demanded that the Iraqi leader allow U.N. weapons inspectors to return to Iraq. He has called Iraq, North Korea and Iran an “axis of evil.”

After talking with Musharraf, Bush was meeting Wednesday afternoon with U.N. Secretary-General Kofi Annan. Annan requested the visit, and the war in Afghanistan was expected to be discussed.

In a speech Tuesday, Musharraf said debt relief was key to developing his economy and turning his country into a modern, progressive Islamic state rejecting religious extremism.

Bush is expected to go at least part way toward meeting Musharraf’s request to forgive his country’s $3 billion in official debt, administration officials have said. But members of Congress hoping to protect America’s dwindling textile industry oppose another Pakistani request: increased access to sell textiles to Americans.

In their meeting at the White House, Bush and Musharraf were to discuss possible economic assistance, plus the war against terrorism and the U.S. desire to see Pakistan return to a democratic government, White House spokesman Ari Fleischer said Tuesday.

Musharraf, who seized power in a 1999 coup, has pledged local and national parliamentary elections in October.

Bush and Musharraf also will talk about military-to-military cooperation, Fleischer said. Musharraf has said Pakistan wants to begin buying military goods from the United States and has sought the release of 28 American F-16 fighters sold to Pakistan in the 1980s, when it was an ally against the Soviet Union. The planes were withheld by Congress when Pakistan developed nuclear weapons.

Musharraf covets favors from the United States to help him navigate the narrow path he must walk to maintain his position and keep his internal opponents at bay. He caused serious turbulence at home among Muslim extremists by aligning his country so closely with the Bush administration’s response to the Sept. 11 terror attacks: waging war in neighboring Afghanistan against those suspected of being responsible.

After the September attacks, Musharraf cut ties with Afghanistan’s ruling Taliban militia and allowed America to use Pakistani air bases and air space. Pakistan also shared intelligence and put troops near the Afghanistan border to catch fleeing al-Qaida.

Those actions have won wide praise from Bush and a sharp turnaround in U.S-Pakistani relations that had deteriorated since the end of the Cold War.

Since then, the United States already has dropped long-standing economic sanctions, committed as much as $600 million in various loans and aid and encouraged the International Monetary Fund to give Pakistan a $135 million loan.