Defence Minister Gordon O'Connor has denied suggesting Canadian troops should be stationed in Pakistan, claiming his comments were misunderstood.

"Media reports today have misreported comments I made while visiting with the government of Pakistan," said O'Connor in a press release issued Saturday.

"At no time did I advocate, suggest or imply I favoured stand-alone Canadian troop deployment in Pakistan."

O'Connor spoke with military officials in Pakistan during a trip to the region, and later summed up the meetings with a reporter from The Associated Press of Pakistan. During the interview, he allegedly said he wanted Canadian soldiers in the country.

"Among other things, I suggested that some Pakistan officers be stationed with our troops in Kandahar and Canadian troops be stationed on the Pakistan side," the Globe and Mail quoted him as saying. "This will assist in information gathering and intelligence sharing on both sides of the border."

But O'Connor said the quote was taken out of context and he did not condone the deployment of troops in Pakistan.

"What I said was that Canada needs to engage with Pakistan as part of our security and reconstruction mission in Afghanistan," said O'Connor.

"This means greater co-ordination between Canadian troops in Kandahar and Pakistani troops in Western Pakistan.

"This would not involve the stationing of stand alone Canadian military units in Western Pakistan, but rather would involve one or two Canadian liaison officers working within Pakistani military headquarters in Pakistan."

According to the Globe report, Pakistan's Islamic political parties have strongly resisted the presence of U.S. soldiers. But a NATO source told the newspaper that an agreement between the two countries allows U.S. forces to cross into Pakistan to pursue insurgents.

Meanwhile, militants supporting the Taliban signed an agreement with Pakistan's government on Saturday, to promote "permanent peace" in the northwestern tribal region. The area is close to the Afghan border.

Officials are expected to announce the agreement next week. According to The Associated Press, the plan forbids militants from attacking government officials or security forces.

In exchange, the government will stop operations against the militants, and "the Taliban have also agreed to distance themselves from foreign militants," an official told AP.

It's believed that Al Qaeda leader Osama bin Laden and his second-in-command, Ayman al-Zawahri, are hiding in the area.

With files from The Associated Press