But the US secretary of state sounded benign about the issue.
A former Ambassador and Foreign Secretary, Khan was appointed to the post by president Gen Pervez Musharraf.
Doctors, academicians and accredited journalists would be the main beneficiaries.
Former Pakistan premier Nawaz Sharif on Tuesday admitted that Islamabad had "violated" an agreement with India signed by him and ex-prime minister Atal Bihari Vajpayee in 1999, in an apparent reference to the Kargil misadventure by Gen Pervez Musharraf.
General Taj has been closely associated with Musharraf, having been his military secretary at the time of the 1999 coup.
When asked to explain, Musharraf, 73, said Gen Sharif played a role in "releasing the pressure" on courts to prevent him from leaving the country.
Manmohan Singh celebrated his 72nd birthday on board his special aircraft Tanjore on the way to Geneva.
Kiyani is a non-controversial officer, who had in the past not come to notice for any dubious association with the Taliban or Al Qaeda or any of Pakistan's fundamentalist organisations.
Former Prime Minister Tony Blair was stumped for words when Pervez Musharraf asked him to resolve the Palestine issue instead of Kashmir during his visit to Islamabad in the aftermath of the 9/11 attacks.
State-run PTV quoted the Inter-Services Public Relations as saying that Kiyani will take up his new assignment once the President, who is seeking re-election in the October 6 ballot, gives up his uniform.
National security advisers of India and Pakistan are expected to meet in October to follow up on the meeting between Prime Minister Manmohan Singh and President Gen Pervez Musharraf in New York.
The Congress president has already got an invitation to visit Pakistan.
Musharraf said: "Extremism and terrorism are the critical problems facing the nation and we have to deal with it very forcefully."
Pakistan's ISI chief Lt Gen Ahmed Shuja Pasha held a secret meeting with former military ruler Pervez Musharraf in Dubai and advised him not to return to the country, according to a media report on Monday.
A Pakistani court on Wednesday issued a notice to former President Gen (Retd) Pervez Musharraf for allowing US drone attacks in country even as a fresh strike by the Central Intelligence Agency-operated spy plane killed at least five in the restive North Waziristan.
Musharraf also directed the Sindh province government to hold an inquiry and submit a report within 48 hours
The medium-lift helicopter, which was carrying Musharraf's spokesman Rashid Qureshi and other security and staff officials, was following the President's aircraft when it crashed near Gari Dupata town after catching fire
Chaudhary Shujat Hussain had served as home minister under deposed prime minister Nawaz Sharif. His brother Pervez Elahi is the chief minister of Punjab province, which has the largest number of members in Pakistan's parliament.
Former Pakistan military ruler General Pervez Musharraf on Friday received praise from former Indian Army chief General V K Singh, who said the incident exhibited the "courage" of the military commander. Singh, who headed the Indian Army between 2010 and 2012, said there were mistakes on the Indian side that allowed Pakistani troops to cross over into Indian territory.
Former president Pervez Musharraf knew that Osama bin Laden was hiding in the garrison town of Abbottabad and the Pakistani intelligence itself had made the safe house that sheltered him, a former Inter-Services Intelligence chief has alleged, according to a media report.
Former military ruler Pervez Musharraf kept such a tight lid on intrusions by Pakistani troops into Indian territory in Kargil in 1999 that the Inter-Services Intelligence learnt of the development when it intercepted Indian Army communications, a retired general says in his new book.
This is part of the $3bn aid granted by President George Bush during his June meeting with President Gen Pervez Musharraf.
Emerging reports from Pakistan suggest that Pakistan President Pervez Musharraf might opt to step down in the wake of a meeting with the Army chief though the President himself denied the news. Musharraf held a meeting with army chief Gen Ashfaq Parvez Kayani at the Army House in Rawalpindi on Wednesday night that lasted over three-and-half hours.
Musharraf is widely believed to have chosen former ISI chief Lt Gen Ashfaq Pervez Kiyani as his successor to head the Army, says Newsweek in its upcoming issue.
Several retired Pakistani generals have warned that the military might react if there is any move by lawyers or the judiciary to humiliate former army chief Pervez Musharraf, according to a media report on Tuesday.
The weekend army reshuffle is a clear sign that Musharraf will not step down as army chief in December, say analysts.
Pakistan President Pervez Musharraf, Commander of 4 Corps (Lahore) Lt Gen Mohammed Aziz and Chief of General Staff Gen Mohammed Yusuf had run a proxy war in Jammu and Kashmir in the early 1990s, a new book has claimed.
On Russia-Pakistan relations, he said that the Russian foreign policy was fully focused on India preventing the raising of bilateral relations to a new level.
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