U.S. ambassador to Mexico resigns after public spat

The U.S. ambassador to Mexico has resigned after a public dispute with President Felipe Calderon over the handling of the war against Mexico's powerful drug gangs.

U.S. Secretary of State Hillary Clinton said on Saturday that she and President Barack Obama had accepted Ambassador Carlos Pascual's resignation "with great reluctance."

The announcement came as a surprise just as Obama began a five-day trip to Latin America, where he is visiting El Salvador, Brazil and Chile, to shore up ties with the region.

The United States and Mexico have long lauded their close economic ties and cooperation on security issues, with more than $1 billion in U.S. aid being funneled to Mexican forces to battle the drug cartels.

But a diplomatic fight erupted after State Department documents published by WikiLeaks showed Pascual criticizing Mexican authorities' lack of coordination in operations targeting cartel leaders.

Calderon lashed out in an unusually critical newspaper interview on February 22, saying Pascual had shown "ignorance" and distorted what was happening in the country.

He also said U.S. security forces failed to coordinate their own efforts and saw each other as "rivals."

Raymond Davis' release paves way for Zardari's visit to US

The resolution of the case of CIA contractor Raymond Davis has paved the way for Pakistan President Asif Ali Zardari's visit to the US and both countries have started working on dates and the agenda for the trip, officials said on Friday.

The US called off a trilateral meeting with Pakistan and Afghanistan after Davis was arrested in Lahore in January for shooting and killing two men.

The development also resulted in a delay in Zardari's planned visit to the US sometime early this month.

Davis was pardoned and freed by a Pakistani court this week after the families of the two men he killed agreed to a "blood money" deal of over two million dollars under Islamic laws.

Presidential spokesman Farhatullah Babar said that the foreign office had begun working on Zardari's visit to the US. "However, no date has been finalised as yet," he said.

Responding to a question, Babar said: "The president's visit to the US was not postponed but rescheduled owing to the Davis issue."