In the telephonic conversation, the two intelligence chiefs reportedly discussed the issue of Davis, a US official arrested  for gunning down two Pakistani men in Lahore, and the status of cooperation between the CIA and the ISI, Dawn News said.

Defence sources confirmed the conversation and said the ISI chief during his talk with Panetta expressed his reservations over covert activities of CIA operatives in Pakistan.
Pasha emphasised Pakistan’s security and sovereignty during the conversation, sources said, adding that the CIA will now be providing the ISI with complete records and data on all such operatives.

However, the Inter-Services Public Relations (ISPR) refused to confirm or deny the telephonic conversation.

On Thursday, Pakistani intelligence officials said cooperation between the two intelligence agencies had been scaled back because of the Davis incident.

Davis, a US official, was arrested in Lahore Jan 27 after he shot dead two youths on a motorcycle. He claimed he acted in self-defence as the armed youngsters were trying to rob him.

His arrest has sparked a diplomatic crisis and strained relations between the US and Pakistan. The US has threatened to withhold the $1.5 billion aid package promised to Islamabad for the war on terror.

A senior official in Islamabad Thursday said the Davis case had strained but not broken relations between the CIA and the ISI, the daily said.

"It’s not business as usual; it’s not open war," the official said. "Cooperation and operations together will continue at a lesser scale."