"At the moment we have no desire to impose any emergency, and for further action we have to see the situation and decide what response is needed," Aziz told Dow Jones Newswires in an interview late Sunday.

President Gen. Pervez Musharraf last week considered imposing a state of emergency in Pakistan to alleviate a worsening security situation, but backed away from doing so after widespread opposition and criticism the move may be motivated by the government's political troubles.

Musharraf is at his weakest since seizing power in a 1999 coup, his standing has been badly shaken by his widely unpopular bid to oust the country’s chief justice and a surge in attacks and suicide bombings across the country since early July.

The rising opposition comes as Musharraf seeks re-election for another five-year term, amid growing calls for greater democracy and for him to quit his army post.

Aziz said the ongoing political crisis and surge in Islamic militancy have stained the country's image abroad, resulting in a slowdown of economic growth over the past few months.

"Whenever you have agitation and uncertainty, it affects your ability to deliver quality of results. That does not help to build the brand of any country," Aziz said in the interview.

He said the "politics of agitation" and the siege at Islamabad's Red Mosque last month "have had an impact on the perception of Pakistan in certain quarters."

Militants have stepped up attacks across Pakistan since the army stormed the mosque in the Pakistani capital to oust radical clerics and their followers early in July. At least 102 people were killed in the fighting.

More than 280 others have been killed in a wave of attacks and suicide bombings, mostly in Pakistan's northwestern tribal belt on the border with Afghanistan, where US and other officials believe al-Qaeda and Taliban are regrouping.

But Aziz said the government is "coping and dealing with the situation" to keep economic growth within its targeted range of 6 percent to 8 percent for the next two years.

"Things are calming down and we hope this environment is conducive for growth," he said.