ISLAMABAD (Reuters) - Pakistani forces killed up to 100 al Qaeda-linked militants in fierce clashes near the Afghan border on Thursday, a security official said, as tensions grew with the United States over how to tackle militancy.

An intensifying insurgency in Afghanistan has piled pressure on Pakistan to go after militants operating from sanctuaries in remote enclaves on its side of the border. It has also led to a sharp increase in U.S. strikes on militants in Pakistan.

The new government in Islamabad says it is committed to the campaign against militancy, launched after the September 11 attacks seven years ago, but bans incursions by U.S. troops.

In the latest fighting in the northwestern Bajaur region, where some analysts believe top al Qaeda leaders have been hiding, the security forces fought pitched battles with the militants loyal to a local commander Qari Zia-ur-Rehman.

“Eighty to 100 militants were killed in Bajaur today. Most of them are foreigners,” the official said on condition of anonymity. He said the nationality of the foreigners was being ascertained.

He said two soldiers were also killed in the fighting

The three days of fighting in the region has brought the death toll to over 100. Separately, the security forces have killed eight militants in the northwestern Swat Valley, a military spokesman said.

Bajaur has been scene of one of the heaviest battles in recent weeks in which more than 600 militants have been killed.

Militants in Bajaur regularly cross into Afghanistan to attack Western troops and government forces there.

A paramilitary soldier stands guard next to a portrait of Pakistan's President Asif Ali Zardari, widower of former prime minister Benazir Bhutto, upon his arrival at the grave of his wife in Garhi Khuda Bakhsh near Larkana September 11, 2008. REUTERS/Nadeem Soomro

Violence in Afghanistan has soared over the past two years as al Qaeda and Taliban fighters have regrouped. The U.S. military said on Wednesday it was not winning there and would revise its strategy to combat militant havens in Pakistan.

The New York Times reported that President George W. Bush had secretly approved orders in July that for the first time allowed U.S. special forces to carry out ground assaults inside Pakistan without the approval of the Pakistani government.

Pakistani stocks, down 34 percent this year, ended lower on Thursday on concern over what one analyst called an “unwelcome spike of geo-political noise” over the conduct of the U.S.-led war on terrorism.

ANGER

Army chief General Ashfaq Kayani said in a strongly worded statement on Wednesday that Pakistan would not allow foreign troops onto its soil.

Pakistan’s sovereignty and territorial integrity would be defended at all cost, he said, dismissing speculation of a secret deal allowing U.S. forces to cross the border.

Helicopter-borne U.S. commandos carried out a ground assault last week in Pakistan’s South Waziristan, a militant border sanctuary, the first known incursion into Pakistan by U.S. troops since the 2001 invasion of Afghanistan, killing 20 people.

Pakistan condemned the raid. Kayani said there were no quick fixes to a highly complex militant problem and reconciliation efforts were also needed.

Prime Minister Yousaf Raza Gilani said Kayani’s statement reflected government views.

Some Pakistani analysts say a frustrated U.S. administration wants to score points before a November election but it risks sparking an uprising among ethnic Pashtuns on the border.

“We will convince the U.S. that it can get nothing through unilateral action in tribal areas except opposition of the masses,” Pakistan’s ambassador to the United States, Husain Haqqani, was reported telling the BBC.

The U.S. attack also complicates the situation for Pakistan’s new civilian president, Asif Ali Zardari, who was sworn in on Tuesday, having forced former army chief Pervez Musharraf to stand down last month after nine years in power.

Support for the U.S.-led campaign against militancy is deeply unpopular in Pakistan, where many people say it has incited violence. Like Musharraf, Zardari is seen as close to the United States but, as an elected civilian leader, he will face pressure to pay heed to public opinion.

At the same time, Pakistan is highly vulnerable to any reduction in U.S. financial support, given the depletion of foreign reserves, which has sparked talk it could default on a sovereign bond next year unless it gets foreign financing.

Pakistan’s state news agency reported last week that the United States had reimbursed Pakistan $365 million for operations and logistical support in the war against terrorism.

Pakistani ties with Afghanistan have also been strained by its complaints that militants operate from Pakistani sanctuaries and its calls for the havens to be eliminated.

Afghan President Hamid Karzai told a news conference in Kabul the United States had to change strategy and he reiterated his call for the sanctuaries to be destroyed.

Pakistan plays down the significance of sanctuaries, saying the Afghan war is an Afghan problem.