Water, Kashmir rankle in India, Pakistan talks

NEW DELHI (Reuters) - Pakistan sought a "mechanism" Wednesday to settle a dispute with India over water from the Chenab river, a row that Islamabad says could harm warming ties between the two nuclear-armed rivals.

Pakistan accuses India of violating a 1960 treaty by reducing the flow of water down the river, which flows from the Indian side of the Kashmir region into Pakistan.

India is building a dam on its part of the Chenab and Pakistan fears a shortage of water for irrigation as a result.

"We should see a mechanism is available and we should avail that mechanism to address this issue," Pakistan's Foreign Minister Shah Mehmood Qureshi told reporters after meeting his Indian counterpart.

"I am reassured that the Indian leadership is conscious of respecting the Indus Water Treaty in letter and spirit." The treaty divides up control between India and Pakistan of several rivers draining into the Indus river basin.

A World Bank team of experts conducted an inquiry into the dispute in 2005 but did not make its findings public.

Pakistan President Asif Ali Zardari said last month he would write to the Indian prime minister asking him to resolve the dispute which could harm bilateral relations that were improving since the two sides started a peace process in 2004.

Indian Foreign Minister Pranab Mukherjee said his country did not wish to deprive its neighbor of water from the Chenab, but said the problem was water scarcity.

"Even at the highest of our conflict and divergence of views between our two countries we did never stop flow of water as per the agreement," he said. "...If (water supply) is not adequate both sides suffer."

He said officials from the two sides would try to find a way to share data so that there would be no misunderstanding.

India has rejected Pakistan's contention that its Baglihar dam on Chenab reduces the flow of water and says the project is crucial for power-starved Kashmir, the disputed Himalayan region over which the two sides have fought two wars.

The two sides described Wednesday's meeting as constructive, making progress on a host of thorny issues, but there was little movement forward on the issue of Kashmir.

(Editing by Dominic Evans)