India, Pakistan PMs to meet, Mumbai attacks cloud talks

SHARM EL-SHEIKH, Egypt (Reuters) - The prime ministers of India and Pakistan meet in Egypt on Thursday for talks which Islamabad hopes will pave the way to the resolution of all disputes with its rival.

But a row over what India sees as Pakistan's failure to act against the founder of Lashkar-e-Taiba, the militant group India blames for last year's attacks on Mumbai which killed at least 166 people, may cloud efforts to resume a formal peace dialogue.

Pakistan Prime Minister Yousaf Raza Gilani, addressing the summit of the Non-Aligned Movement in the Egyptian resort of Sharm el-Sheikh, the venue for Thursday's talks, said there had been "some forward movement" in ties that he wanted sustained.

Indian Prime Minister Manmohan Singh, in a comment clearly aimed at Pakistan, told delegates the "infrastructure of terrorism" must be dismantled, echoing India's repeated calls for Pakistan to disarm militant groups.

In preparation for the meeting, the foreign secretaries of the two countries met on Tuesday and Wednesday.

Indian Foreign Secretary Shivshankar Menon described those talks as "good and detailed" and said dialogue between the two was essential but did not elaborate on what they might achieve.

"We are in the middle of our conversation, the work is still ongoing, I can't tell you the outcome," Menon said on Wednesday.

Pakistan is keen to revive the five-year-old "composite dialogue" covering all disputes between the two countries.

Singh has said he was willing to meet Pakistan "more than half way" if it cracked down Lashkar-e-Taiba, as well as against other militant groups that launch attacks in the Indian part of the disputed Kashmir region and elsewhere in the country.

A visit to India by U.S. Secretary of State Hillary Clinton, starting on Friday, could encourage Singh to make a conciliatory gesture.

The United States is keenly interested in resumption of talks between the two countries to ease tensions on Pakistan's eastern border with India, so it can focus on fighting Taliban militants on its western border with Afghanistan.

Peace between the two nuclear-armed Asian rivals had helped boost bilateral trade to over $1 billion, encouraged cross- border bus and train services, and eased visa restrictions for travel.

(Editing by Edmund Blair and Philippa Fletcher)