Peace should be on the agenda, says Barack Obama

Barack Obama has called on India and Pakistan to renew their efforts to find peace, even as he said Islamabad was not moving quickly enough to counter militants operating from inside its borders.

In comments that appeared to underscore the high-wire act of diplomacy the US president is trying to pull off while on the three-day visit to India, Mr Obama said Washington would not act as an intermediary between the two countries.

However, he told a group of students in Mumbai: "My hope is that over time, trust develops between the two countries, that dialogue begins, perhaps on less controversial issues, building up to more controversial issues. There are more Pakistanis who've been killed by terrorists inside Pakistan than probably anywhere else."

The president has received criticism from some opposition parties in India after he failed to directly mention Pakistan when he arrived in India on Saturday and spoke of the 2008 attacks at the Taj Hotel and other locations in Mumbai, that left more than 160 people dead.

In the aftermath of the attacks, the so-called "composite dialogue" peace process between India and Pakistan was put on hold and while there have been a series of high-level meetings, the relationship between the two remains tense.

The president, who stayed at the seafront hotel in what aides said was a clear sign of solidarity, had talked about the militants and the terror they wrought, but was criticised by the right-wing Bharatiya Janata Party (BJP) for failing to attribute the blame to Pakistan. Asked why he had not done so, Mr Obama reflected a reality in which the US is paying billions of dollars to Pakistan in aid as it pushes it to do more against militants responsible for cross-border strikes in Afghanistan.

"Pakistan is a strategically important country, not just for America, but for the world," he said. "India and Pakistan can prosper and live side by side. This can happen and this should be the ultimate goal. The US can be a partner but cannot impose this process. India and Pakistan have to arrive at an understanding."

Mr Obama started his visit to India, one of four countries he is including on a tour through Asia, by announcing more than 20 deals he said were worth up to $10bn and would help support 50,000 US jobs.

He also said the US was to relax export controls over sensitive technology, a demand of India's that will help deepen ties between the two countries. The president is to hold formal talks today with India's prime minister, Manmohan Singh.

On a domestic level, Mr Obama also recognised he needed to make "midcourse corrections" in the aftermath of last week's mid-term elections if he is going to win over a frustrated and divided electorate.