Taliban and al-Qaeda leaders, including Osama bin Laden, are hiding in Pakistan's tribal areas, where the US is fighting a war on terror, Vice President Joe Biden said on Wednesday.

"In the FATA, the western part of Pakistan in the mountains on the Afghan border, that is a war on terror. That's where al-Qaeda lives. That's where bin Laden is. That's where the most radicalised part of the Taliban is," Biden told Wolf Blitzer of the CNN in an interview.

"The situation we have as it relates to problems that exist in other parts of the world, they aren't all related to terror," he said in response to a question if the Obama Administration has stopped use of the phrase "global war on terror".

Biden asserted there is a war on terror.

"Terror is a legitimate threat. It is a threat that comes from al-Qaeda and those organisations that have morphed off of al-Qaeda, but there are other interests we have beyond merely - for example, the situation in the Middle East is not a global war on terror. But it matters to us mightily whether or not we end up with an accommodation between the Israelis and the Palestinians," he said.

The Vice President said Obama Administration is concerned that al-Qaeda has been able to reconstitute itself under the Bush administration in the mountains regions on the border of Afghanistan and Pakistan.

"Up till now there has been no targeted policy that has as its goal the elimination of that element of extremism in the world directed at the United States of America," he said.

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