US President Barack Obama has signed a bill that gives $7 billion in aid to Pakistan over five years, a measure that the nuclear-armed US ally's military had claimed was an intrusion into the nation's internal affairs.

The White House said the aid package signed on Thursday provides $1.5 billion annually for economic and social programs as the Obama administration works to shore up Pakistan's return to civilian rule and to encourage it in the fight against Taliban and Al-Qaida militants.

The extremists hold strongholds inside Pakistan, especially along the border with Afghanistan where the United States is in the eighth year of a war.