The EU is worried about the spread of 'terror' from Pakistan
The European Union (EU) will give $100m to Pakistan in new humanitarian aid to help efforts to tackle "the economic crisis and terrorism", officials say.
The money is aimed at helping about two million people displaced by fighting between troops and the Taliban in parts of north-west Pakistan.
The aid was announced at the start of summit talks between President Asif Ali Zardari and EU leaders in Brussels.
The talks reflect increasing EU concern over instability in Pakistan.
Officials say they are worried about the effect such instability could have on international efforts to end the insurgency in Afghanistan.
"I welcome President Zardari's commitment to reinforce the democratic institutions, reform the economy and defeat extremism and terrorism, which pose a threat not just to his country, but to its neighbours and to the rest of the world," European Commission President Jose Manuel Barroso said.
Mr Zardari met Czech President Vaclav Klaus, who is chairing the summit
Officials say the aid is meant to provide food, water and shelter to people who have fled fighting in recent months in Pakistan's North West Frontier Province.
"In exchange, we want Pakistan to take the fight against terrorism very seriously and that they do a lot on their home front," said EU External Relations Commissioner Benita Ferrero-Waldner.
Correspondents say the money is in addition to more than $670m the European Commission has already pledged in long-term development aid to Pakistan over the next five years.
The EU says that it eager to develop secular and democratic governance in Pakistan in addition to strengthening trade ties.
President Zardari said trade rather than aid was his chief goal in the landmark summit.
"With the help of the world we will win this, and half the war is the hearts and minds of the people," he said.
"I'm looking for MOUs [memorandums of understanding] and not IOUs and I intend to get them," he added after talks with Nato ambassadors.
"I'm always hopeful, I'm a man who has walked from the gallows to the presidency," the president said, referring to his rise to the presidency last September after fighting off charges of corruption and murder.
Earlier, Mr Zardari told NATO officials that defeat against the Taliban was not an option for Pakistan
Correspondents say the worsening security situation in Pakistan has made it a key foreign policy priority for Nato and the EU.
On Tuesday, a US Senate committee voted in favour of trebling non-military aid to Pakistan to $7.5bn over five years.
EU counter terrorism officials have warned of the threat of attack from young Europeans radicalised and trained in Pakistan.
The BBC's Dominic Hughes in Brussels says it is unusual for a relatively insignificant trading partner like Pakistan to be given this kind of treatment - the fact the summit is taking place at all is a sign of how bad things have got.
In Pakistan itself preparations are continuing for what the authorities have called a full-fledged military operation against the leader of the Pakistan Taliban, Baitullah Mehsud.
His network of fighters has accepted responsibility for - or been blamed for - many suicide bombings in Pakistan.