ISLAMABAD (Reuters) - Nuclear-armed Pakistan and India must act to defuse serious tension that has flared after the militant assault on the Indian city of Mumbai, Pakistan's foreign minister said on Saturday.
India has blamed "elements" from Pakistan for the coordinated assault on its financial capital raising the prospect not only of a breakdown in peace efforts between the old rivals, but of renewed confrontation across their border.
Pakistan condemned the assault as a "barbaric act of terrorism" and denied any involvement by state agencies.
It has vowed to cooperate in fighting terrorism but it backtracked on a decision to send the chief of its spy agency to India to help with the investigation in a move likely to revive questions about who is in charge of the shadowy organisation.
The attacks on two luxury hotels and other sites in Mumbai came after Pakistani President Asif Ali Zardari, widower of former prime minister Benazir Bhutto who was assassinated last year, had made bold moves to improve ties with India.
But Foreign Minister Shah Mehmood Qureshi told a news conference after a special cabinet meeting the Mumbai attacks had put pressure on ties.
"These are sensitive moments," Qureshi said. "The situation is serious, let us not fool ourselves ... when the people in India feel this is 9/11 for India."
India and Pakistan have fought three wars since gaining independence in 1947 and went to the brink of a fourth after a December 2001 militant attack on India's parliament that India also linked to Pakistan.
"It is in Pakistan's interests and in India's interests to defuse the situation. Lowering of tension is essential," he said.
Zardari, battling Islamic radicals at home, told Indian television he would cooperate in the investigation.
"If any evidence comes of any individual or group in any part of my country, I shall take the swiftest of action in the light of evidence and in front of the world," he told CNN-IBN.
Pakistan is seen as vital to U.S.-led effort to defeat al Qaeda and bring stability to its western neighbour, Afghanistan, but a senior security official said war on terror would not be a priority if tension escalated on the eastern border, with India.
"If something happens on that front, the war on terror won't be our priority," said the official, who declined to be identified. "We'll take out everything from the western border."
The security official also denied the involvement of any Pakistani institution in the Mumbai attack and said the next day or two would be crucial in assessing India's response.
SPY CHIEF NOT GOING
Qureshi, who was in India on a scheduled visit to boost ties when the Mumbai assault began, echoed that, saying terrorism was a common enemy and India should not jump to conclusions.
"Finger-pointing or coming to hasty conclusions will play into the hands of the common enemy, that is, the terrorists."
In an unprecedented step, government leaders agreed on Friday to let the head of the military's Inter-Services Intelligence (ISI) agency at the request of the Indian prime minister.
But the prime minister's office said on Saturday an ISI representative would go instead. The reversal will revive questions about who is in charge of the agency that analysts have likened to a military-run state within a state.
The New York Times reported that U.S. President George W. Bush had asked Pakistan Prime Minister Yousaf Raza Gilani just that after U.S. officials accused ISI agents of involvement in a suicide bomb attack on the Indian embassy in Kabul in July.
Pakistan says India is too hasty to blame it for attacks when New Delhi has homegrown militants. But Pakistan has a history of using militants to further foreign policy objectives, initially to battle Soviet forces occupying Afghanistan in the 1980s.
Pakistan supported militants fighting Indian forces in the disputed Kashmir region for years but began to rein them in after the Sept. 11 attacks on the United States.
Sayed Salahuddin, a leader of militant groups in Pakistani Kashmir, called the slaughter in Mumbai "reprehensible", and denied that any member of his alliance was involved.
The Mumbai assault bore the hallmarks of Pakistan-based militant groups such as Lashkar-e-Taiba or Jaish-e-Mohammed, blamed for the 2001 attack on India's parliament.
Lashkar-e-Taiba denied any role. Instead, the little-known Deccan Mujahideen claimed responsibility.
(Additional reporting by Augustine Anthony, Abu Arqam Naqash and Kamran Haider)
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