US Secretary of State Condoleezza Rice promoted expanding defence ties with India and Pakistan yesterday but stopped short of announcing fighter jet sales to the nuclear-armed rivals, US officials said. Rice, at the start of her first trip to Asia as secretary of state, said relations with the two neighbours had never been better which, she said, had helped India and Pakistan in their year-old peace moves.

This would be a major US policy shift and a final step toward tacit acceptance of both countries? possession of nuclear weapons that would also open the Bush administration up to criticism it could fuel their rivalry.

?We are going to discuss the expanding defence and security relationships we have with both of them. But there is no particular announcement to be made on the trip,? a senior state department official said after newspapers reported Rice would signal during her visit the sales would go ahead.

?It will come up in the context of the broader issues she will be discussing with both governments,? a senior administration official said, referring to the F-16 issue. Pakistan is a key US partner in the war on terrorism and won major non-NATO ally status from Washington last year.

India is a key US market and technology partner that has deepened its defence cooperation with the United States in the last few years.

<B>Battle against Islamic militants</B>

?Our ability to have good relations with India and good relations with Pakistan, I think, has helped the two states to have good relations with each other as they have become in a sense ? both of them ? on the right side on the war on terror,? Rice told reporters on Tuesday aboard her plane.

After months of wrangling, the neighbours plan a bus service across disputed Kashmir in April, a signal they want to build trust and end decades of conflict over the Himalayan region.

Rice, who met Indian leaders yesterday, said the United States would ?aggressively? press its strategic defence dialogue with India, the world?s largest democracy, while supporting Pakistan in its battle against Islamic militants.

Rice will fly later to talks with President Pervez Musharraf in Islamabad and prod him to strengthen democracy. Musharraf, who came to power in a bloodless military coup in 1999, broke a pledge last year to give up his top army post.

While Rice will urge reforms, she will balance that pressure with support for an ally in the war on terrorism after Musharraf sided with the United States and against militants following the Sept. 11, 2001, attacks. ?The president said that democracy would be central in our dialogue with every country in the world ? and it will be,? Rice said.

?In Pakistan, we fully expect President Musharraf to be committed to a democratic path for Pakistan.? In Pakistan, nuclear proliferation will also loom large as the Bush administration prods Musharraf to ensure a Pakistani-run black market for nuclear technology that was revealed in 2003 has been rolled up.

On Tuesday, diplomats and nuclear experts said Pakistan had developed new illicit channels to upgrade its nuclear weapons programme, despite efforts by the UNatomic watchdog to shut down all illegal procurement avenues.

But US officials have generally been satisfied with Pakistan?s proliferation investigation and will not pressure Musharraf too hard because the scientist at the centre of the original scandal is a national hero. ?We?re comfortable with what they have done,? one official said.

<B>Saul HUDSON Sanjeev MIGLANI</B>