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The financial sector will make up a smaller part of the U.S. economy in the future as new regulations clamp down on "massive risk-taking," President Barack Obama said in an interview published on Saturday.

Obama, whose young administration has spearheaded a raft of reforms in the banking sector as part of efforts to tackle the financial crisis, said the industry's role in the United States would look different at the end of the current recession.

"What I think will change, what I think was an aberration, was a situation where corporate profits in the financial sector were such a heavy part of our overall profitability over the last decade," he said told the New York Times Magazine.

"Part of that has to do with the effects of regulation that will inhibit some of the massive leveraging and the massive risk-taking that had become so common."

Obama said some of the job-seekers who may normally have gone to the financial sector would shift to other areas of the economy, such as engineering.

"Wall Street will remain a big, important part of our economy, just as it was in the '70s and the '80s. It just won't be half of our economy," he said.

"We don't want every single college grad with mathematical aptitude to become a derivatives trader."

The Obama administration in March proposed sweeping reforms to curb risk-taking on Wall Street and close regulatory gaps to prevent the kind of excesses that led to the worst financial crisis since the 1930s Great Depression.

The president said in the interview that better regulation would help restore confidence in the U.S. financial system.

"A more vigorous regulatory regime, I think, will help restore confidence, and you're still going to see a lot of global capital wanting to park itself in the United States," he said.

REGAINING TRUST AND CONFIDENCE

Obama expressed optimism that the market for securitized products would pick up, though he said that could take time.

The Federal Reserve, with taxpayer capital from the U.S. Treasury, is supporting consumer and real estate lending markets through a loan facility that could reach $1 trillion.

Holders of existing asset-backed and commercial mortgage-backed securities can get loans from the Fed by putting up their securities as collateral.

The facility aims to unclog frozen credit markets and jumpstart securitization.

"We're going to have to determine whether or not as a consequence of some of the steps that the Fed has been taking, the Treasury has been taking, that we see the market for securitized products restored," Obama said.

"I'm optimistic that ultimately we're going to be able to get that part of the financial sector going again, but it could take some time to regain confidence and trust."

Part of Obama's regulatory reforms include the creation of a new "systemic risk regulator" with broad powers to seize large non-bank financial firms, such as insurers, hedge funds or private equity companies, if they are deemed to threaten the stability of the financial system.

Large, "systemically important" firms would be required to hold bigger capital cushions.

Obama also said financial rules should be crafted according to what an institution actually does to avoid a regulatory gap in areas such as commercial and investment banking.

"Other countries that have not seen some of the problems in their financial markets that we have nevertheless don't separate between investment banks and commercial banks," he said, citing Canada as one example in that area.

"The experience in a country like Canada would indicate that good, strong regulation that focuses less on the legal form of the institution and more on the functions that they're carrying out is probably the right approach to take."

Washington, President Barack Obama's tech-savvy administration has taken another leap into cyberspace with the roll-out of 'White House 2.0.' linking it to social networks MySpace and Facebook and hot micro-blogging service Twitter.

'Today the White House is taking steps to expand how the administration is communicating with the public,' the White House blog said Friday announcing the additions to the recently launched official Flickr photostream.

'Technology has profoundly impacted how - and where - we all consume information and communicate with one another. WhiteHouse.gov is an important part of the Administration's effort to use the internet to reach the public quickly and effectively - but it isn't the only place.'

The blog post contains links to the White House's pages on Twitter, Facebook, MySpace, Flickr, Vimeo, YouTube, and iTunes.

'The WhiteHouse blog will power a lot of the content in these networks,' the blog post explains, 'but we're looking forward to hearing from our fans, friends and followers.'

During the White House race, Obama's campaign pioneered extensive use of social networking technologies that helped power him into the Oval Office.

Content from Obama's website WhiteHouse.gov is being fed in real time to White House profile pages on MySpace and Facebook and members of the communities can sign up as Facebook 'fans' or MySpace 'friends.'

The White House had more than 31,000 fans on Facebook and more than 4,000 friends on MySpace within a few hours of the pages going online while more than 8,500 people had signed up as 'followers' of the White House on Twitter.

The blog post referred to an Obama speech from a week earlier in which he said the government needs to 'recognize that we cannot meet the challenges of today with old habits and stale thinking.'

Besides revamping WhiteHouse.gov, the Obama administration has created several other websites including recovery.gov to track the economic stimulus bill and transparency.gov to monitor spending.

Worried about the expanding writ of the Taliban in Pakistan, a former US ambassador to the UN, John Bolton, has said the Obama administration must seriously consider pulling out as many nuclear weapons as possible from Pakistan.

Bolton said such a step would certainly allay fears about the consequences of the Pakistan government caving to the Taliban.

He urged Obama to push for the issue during trilateral talks with Pakistan and Afghanistan next week.

"President Obama's talks next week in Washington with the presidents of Afghanistan and Pakistan provide a clear opportunity to take the hard steps necessary to secure Pakistan's nuclear arsenal and defeat the Taliban," The Nation quoted Bolton, as saying.

Bolton emphasized the need of greater US assistance to both Pakistan and Afghanistan to counter the ever advancing extremists.

"We must strengthen pro-American elements in Pakistan's military so they can purge dangerous Islamicists from their ranks, roll back Taliban advances and, together with our increased efforts in Afghanistan, decisively defeat the militants on either side of the border," he added.

Bolton also highlighted the need to reduce the heightened tension between India and Pakistan, and pressurize Pakistan to put the disgraced scientist Abdul Qadeer Khan back under house arrest.

"We must strive to keep Indo-Pakistani relations stable, if not friendly, and pressure Islamabad to put nuclear-weapons proliferator and father of Pakistan's nuclear programme Abdul Qadeer Khan back under house arrest," he said.

As American confidence in the Pakistani government wanes, the Obama administration is reaching out more directly than before to Pakistan president Asif Ali Zardari's chief rival Nawaz Sharif, the New York Times said in a report.

American officials have long held Sharif at arm's length because of his close ties to Islamists in Pakistan, but some Obama administration officials now say those ties could be useful in helping Zardari's government to confront the stiffening challenge by Taliban insurgents, the influential newspaper said Saturday.

The move reflects the heightened concern in the Obama administration about the survivability of the Zardari government, the daily said.

Gen. David H. Petraeus, the head of the United States Central Command, has said in private meetings in Washington that Pakistan's government is increasingly vulnerable, according to unnamed administration officials cited by the Times.

General Petraeus is among those expected to attend an all-day meeting on Saturday with senior administration officials to discuss the next steps in Afghanistan and Pakistan, in advance of high-level sessions next week in Washington, when Zardari and President Hamid Karzai of Afghanistan will meet with President Obama at the White House.

Washington has a bad history of trying to engineer domestic Pakistani politics, and no one in the administration is trying to broker an actual power-sharing agreement between Zardari and Sharif, unnamed administration officials were cited as saying.

But they say that Secretary of State Hillary Clinton and Richard C. Holbrooke, the special representative for Afghanistan and Pakistan, have both urged Zardari and Sharif to look for ways to work together, seeking to capitalise on Sharif's appeal among the country's Islamist groups.

Obama administration officials have been up front in expressing dissatisfaction with the response shown by Zardari's government to increasing attacks by Taliban fighters and insurgents with Al Qaeda in the country's tribal areas, and along its western border with Afghanistan.

A Defence Department official cited by the Times said the administration wanted to broker an agreement not so much to buoy Zardari personally, but to accomplish what the administration believes Pakistan must do.

'The idea here is to tie Sharif's popularity to things we think need to be done, like dealing with the militancy,' the unnamed official was quoted as saying.

Both Holbrooke and Clinton have spoken with Sharif by telephone in the past month, and have urged Zardari's increasingly unpopular government to work closely with Sharif, administration officials said.

Despite fierce op-ed page debates over the Obama administration's actions so far on Israel, Iran and the Middle East, American Jews are unwavering in their support of the new president, according to a new Gallup poll.

Tracking polls conducted through Obama's first 100 days in office show that 79 percent of Jews approve of Obama's performance so far, about the same percentage that voted for him last November, reports The Jerusalem Post.

Only Muslims gave Obama higher approval ratings, with 85 percent responding that they approve of the president. Respondents who identified themselves as non-religious also indicated overwhelming support, with 73 percent indicating approval.

Liberal Jews showed overwhelming support for the Democratic president, with 96 percent approving of his job performance. Among those who described themselves as moderate, 77 percent approved of Obama.

Jewish conservatives split evenly, with 45 percent approving of Obama and 45 percent disapproving.

The poll's authors noted that Obama has taken a strong stand on the Middle East by appointing George Mitchell as a special peace envoy and dispatching Secretary of State Hillary Clinton to the region. The new administration has also signaled shifts in their approach to Iran's nuclear program.

"It is not clear whether US Jews endorse Obama's approach, but the fact that four in five approve of the job he is doing - consistent with their vote for him in the election - suggests they at least tolerate it," they wrote.

Even though the Pakistan Army has initiated military operation against the Taliban in the North West Frontier Province (NWFP) and has claimed success in some areas, the offensive might not yield the desired results, because Pakistani officers are hesitant to carry out an attack against their own people, a US expert believes.

A retired US Army colonel and author, Ralph Peters said Washington must understand that Pakistani military personnel might be facing problems fighting their own people.

"Pakistani officers just don't want to fight against their people," The Daily Times quoted Peters, as saying.

"Our diplomats and generals can't understand why Pakistan's million-man military avoids confronting the Taliban as the extremists tear into the country's flesh," he added.

Peters, while comparing the struggle in Pakistan with America's civil war said : "Look to our own history. Along the Indus River, 2009 looks worrisomely like 1861 did on the Potomac, the river which flows through West Virginia and Washington."

"After the attack on Fort Sumter, President Abraham Lincoln offered command of the Union forces to the most respected officer in the US Army, Colonel Robert E Lee. Lee was not in favour of secession," he said.

"Lee declined the offer. For all of his patriotism, he felt he couldn't lift his sword against his native Virginia, against his relatives, friends and neighbours," Peters said.