Islamabad: The US has made it clear that it can 'get back to business' with Pakistan after the release of suspected CIA contractor Raymond Davis, whose arrest in Lahore on murder charges for gunning down two men has become a major irritant in bilateral ties.

During meetings with Pakistan's top leadership yesterday, US Special Representative for Afghanistan and Pakistan Marc Grossman said Washington wanted the immediate release of Davis and that there would be no business as usual until the matter is resolved.

"I'm confident that we can resolve this (Davis) problem and once we do we can get back to business...we can build the relationship between the US and Pakistan," Grossman said during an interaction with a group of journalists last night.

Grossman repeatedly said the US administration wanted the immediate release of Davis, who was arrested in Lahore on January 27 after he shot dead two armed men he claimed were trying to rob him.

Police rejected Davis' claim of acting in self defence and booked him for murder.

The matter was complicated following reports in western media that Davis was a security contractor working for the CIA.

Separately, reports said the two men Davis killed were operatives of the ISI.

Pakistan's leadership, facing pressure from religious groups, has rebuffed US demands to free Davis and said that his case will be settled by the courts.

The Obama administration continues to insist that Davis should be freed, even though the US needs Pakistan's help for the military campaign in Afghanistan as well as a negotiated settlement in that war-torn country.

Grossman said Pakistan and the US need to remove the 'irritant' of Davis' arrest from their relationship and reminded the Pakistani leadership that both countries 'are best served when we stand together'.

Emphasising the importance of the two sides working in consonance, Grossman said this was also crucial for restoring peace in Afghanistan through a negotiated solution and ensuring stability in the region.

Even as Grossman said Pakistan and the US wanted a mutually beneficial relationship that could enable Pakistan to become stable, democratic and prosperous by freeing itself from extremist violence, he stressed that the real challenge was to determine what constituted the "mutual interest" that could form the basis of enduring ties.

He said his discussions with Pakistani interlocutors 'underscores...the central point and that is the relationship is based on mutual interest and the challenge obviously is to find that mutual interest, we have to identify that and we are clearly on that'.

Referring to Afghanistan, Grossman called for Pakistan's support for the Afghan-led reconciliation process but one that joined 'both the US and Pakistan' - an apparent indication that Washington would not accept any move by Islamabad to back groups like the Haqqani network in efforts to find a solution.

In his meetings with Pakistani leaders, Grossman said he had noted the link between the insurgency in Afghanistan and terrorist safe havens in Pakistan's tribal belt and demanded the eradication of these sanctuaries.

The Afghan reconciliation process relies on Pakistan 'taking decisive action' against the Taliban's activities from Pakistani territory, he said.

During their meetings with Grossman, President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani sought to quell tensions with the US over the arrest of Davis and said the two countries should focus on long-term strategic ties and restoring confidence and trust in key areas, including intelligence sharing.