Bush, who arrived in Islambad last night following a three-day visit to India, held one-to-one talks with Musharraf at the President House amid tight security.
The US President was received by Musharraf and Prime Minister Shaukat Aziz when he arrived in his limousine from the highly-guarded US embassy, where he reportedly rested last night along with wife Laura Bush.
Bush was accorded the Guard of Honour by Presidential guards and personnel from all the three services. Helicopters hovered over and thousands of security personnel guarded empty streets.
After the welcome ceremony, both Bush and Musharraf held one-to-one talks followed by the delegation-level parleys covering a variety of issues, including the emerging close ties between India and the US, specially the just concluded high-profile visit of Bush to India during which the two countries finalised the the civilian nuclear energy cooperation deal.
Pakistan has already said it would seek a similar arrangement from Bush as it also required nuclear energy for its growing economy.
Ahead of the talks, officials said other important issues that would figure in the parleys included the Indo-Pak peace process and progress in resolving the Kashmir issue, terrorism, as well as Pakistan and US military operations against the al Qaeda and Taliban terrorists holed up in North Waziristan tribal agency bordering Afghanistan.
The talks were also expected to cover a number of bilateral issues, specially defence ties, Pakistan's plans to acquire F-16 fighter planes, continuing US aid as well as trade between the two countries.
Pakistani officials had earlier said the two sides were also expected to finalise a Bilateral Investment Treaty during Bush's visit.
After the talks, Bush would attend a presentation on the earthquake relief programme for which the US had contributed nearly USD 600 million and spared over 30 helicopters to airlift supplies to the quake-hit areas of Pakistan Occupied Kashmir and North West Frontier Province.
As per the official programme, Bush would drive down to the US embassy located in the well-protected Diplomatic Enclave a few kilometres away from the Presidential building and take part in a meeting organised by the mission. He is also expected to watch a cricket match between school boys' teams, which would also be attended by Pakistan's cricket captain Inzamamul Haq and some of his teammates.
Besides, Bush and his wife would attend a banquet to be hosted by Musharraf tonight and leave for home thereafter.
Protesting against the US President's visit, Islamic alliance the Muttahida Majlis-e-Amal gave a call for nationwide observance of 'Black Day' today while cricketer-turned politician Imran Khan planned to hold a rally from Rawalpindi to Islamabad.
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