Pakistan president: 'Our hopes are high'

Musharraf: "Our secret agencies need to be more successful."

ISLAMABAD, Pakistan (CNN) -- As the United States removes members of its diplomatic staff from Pakistan because of threats against American interests, Pakistan's president, Gen. Pervez Musharraf, said Saturday he would use "all possible means" to rid the country of terrorists.

Addressing the country in a televised National Day speech Saturday, Musharraf said an overhaul of the government's institutions would have to take place in order to successfully crack down on terrorism within the country's borders.

"Secret agencies need to be more successful ... their role is not to inform after an incident has happened, but to inform before something has happened, so something can be done about it," Musharraf said.

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U.S. citizens in Pakistan have been the target of several recent attacks. Last Sunday, a grenade attack on a church near the U.S. Embassy in Islamabad left five people dead, including two Americans -- the wife and daughter of a U.S. diplomat. In January, Wall Street Journal reporter Daniel Pearl was kidnapped and executed by his captors.

The U.S. State Department announced Friday it was ordering all non-essential personnel and family members of diplomats to leave Pakistan in the face of further threats against American interests.

Pakistan has been a key ally to the United States in its successful effort to remove the Taliban regime and the al Qaeda terror group, blamed for the Septempber 11 attacks, from neighboring Afghanistan. Although many Pakistanis have criticized Musharraf's willingness to aid the Western superpower, Musharraf said Saturday there are no divisions among the people.

"We are all united and our hopes are high," Musharraf said. "I can probably say that the whole Pakistani nation is full of unity and I am confident that in time we will be successful, god willing."

National Day, which marks the day in which a historical resolution was put forth in 1940 that led to the creation of Pakistan, is usually celebrated with a parade of the country's armed forces. However, Musharraf explained that parade would not happen this year because most of the forces are patrolling the country's borders with India, where tensions between the two nuclear neighbors have recently risen.

"Kashmir and the rest of the issues should be sorted out by mutual talk but if India wants to talk in an aggressive way, than it should have no misconceptions," Musharraf said. "If anyone tries to challenge (Pakistan's) power, they will learn a lesson that they will remember."

India has also amassed troops along its border with Pakistan, which it blames for harboring militants that carried out a deadly attack on the Indian Parliament in December.

The two countries also continue to fight over the disputed region of Kashmir.

In his speech, Musharraf was widely expected to announce a referendum that would have kept him in power for five more years. He made no mention of the possible vote, but he did say he expected elections in October to return the country to a democratic government.

Musharraf seized power from former Prime Minister Nawaz Sharif in a bloodless coup in 1999, returning the country to military rule.