Pakistan seems to have failed to seal the US $700 million deal for the purchase of eight F-16 fighter jets from the US following a row between the two countries over their financing, a media report said on Saturday.

The Pakistani government was required to provide the Letter of Acceptance for purchase of the jets by May 24, but Dawn News reported that the document was not issued leading to expiry of the offer.

"Pakistan decided not to fully fund the case with national funds, so the terms of sale have now expired," a diplomatic source was quoted as saying by the daily.

However, Pakistan's Ambassador to US Jalil Abbas Jilani, told the daily that "a dead-end has not been reached as yet".

Initially, the US $700 million deal for eight F-16C/D Block-52 multi-role fighters, was to be partially financed through the US Foreign Military Financing (FMF) programme but the Congress disallowed subsidising the sale.

The subsidising was disallowed over concern that Pakistan had not done enough to end the dreaded Haqqani network's terror sanctuaries on its soil as well as fears over Islamabad's nuclear programme.

Pakistan, which expected to get the fighters at the subsidised rate of USD 270 million, was subsequently asked by the US administration to make the full payment for the eight aircraft from its national resources.

This was not acceptable to Pakistani authorities, who remained adamant that the offer must come without any preconditions.The aircraft were required by Pakistan Air Force (PAF) for counter-insurgency and counter-terrorism operations, the report said.

The jets would have come with "all-weather, non-daylight environments and self-defence/area suppression capability".

It was unclear why Pakistan missed the opportunity despite pressing requirement for the jets, although it had originally desired to acquire 18 F-16s, the daily said.

Some quarters believe that providing the Letter of Acceptance would have kept the window open for re-negotiating the financing arrangement at a later stage, it said.

Pakistan Prime Minister's Adviser on Foreign Affairs Sartaj Aziz said last month that Pakistan could look to buy the aircraft from some other country if the deal did not go ahead.

He also said earlier this month that Pakistan's ties with the US had witnessed a "downward slide" amid the row over the Congress' decision to block the sale of the jets.

Defence Minister Khawaja Asif had said last week that Pakistan will explore other options to meet its defence needs if the deal for F-16s did not materialise with the US.