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WASHINGTON, Jan 17 (AFP) - US Defense Secretary Donald Rumsfeld expressed hope Thursday that tensions between nuclear armed India and Pakistan will ease soon, warning that it was in neither country's interests to remain at a high state of military mobilization for long.

Rumsfeld made the comments after signing an agreement with visiting Indian Defense Minister George Fernandes that clears the way for revived US arms sales to India and greater military-to-military cooperation after a three year break.

"I do not believe it is in either of their country's interests to stay for long periods in a state of high mobilization," Rumsfeld said with Fernandes at his side. "I think it's unhelpful to them, its unhelpful to the world."

He said he was "hopeful" that Indian and Pakistani leaders would find ways to discuss their differences, either directly of indirectly, "and that over the coming weeks and days we will see a relaxation of that tension."

The crisis has caused Pakistan to shift troops and military resources away from its western border with Afghanistan where they have been used to block the entry of fleeing al-Qaeda fighters.

It also has put a squeeze on US access to bases in Pakistan and prompted detailed discussions between US and Pakistani military over the disposition of US forces in the event of a conflict between Pakistan and India, which have fought three wars since independence from Britain.

"We are most anxious to see that the terrorists in the Taliban and the Al Qaeda do not escape out of Afghanistan into Pakistan," Rumsfeld said.

"It's not in Pakistan's interest. It's not in our interest. It's not in Afghanistan's interest, because they can come right back across that border. And it's certainly not in India's interest.

But Fernandes, who joined Rumsfeld at a Pentagon news briefing, gave no indications that India was prepared to take steps to defuse the military tensions despite a speech by Pakistani President Pervez Musharraf Saturday outlawing militant Muslim groups.

He said India had to take "some very strong steps" in response to a suicide attack on the Indian parliament December 13, which New Delhi blamed on militant Muslims based in Pakistan.

"We decided that we needed to immediately seal off our frontiers and be prepared for any eventuality, and that's where both sides are at the moment," he said.

Fernandes and Rumsfeld signed a "general security on military information agreement," normally a precursor to arms sales and military cooperation that would involve access to classified information.

"We look forward to much greater cooperation between the United States military and our military and also procuring such of these items that we need to procure from here," said Fernandes.

He said India was interested in acquiring engines for a light combat aircraft, a project that had been put on hold.

The United States cut off military ties with India and Pakistan after their back-to-back nuclear weapons tests in 1998.

But US concerns about nuclear tensions in South Asia and interest in India as a rising regional power that could check China prompted a reappraisal by the Bush administration.

Fernandes said his discussions with Rumsfeld were "an important milestone in this expanding relationship."

He said India's relationship with the United States was now "qualitatively different from the days of the Cold War," when Washington and New Delhi kept each other at arms length.

"In the coming months, we have an ambitious schedule of meetings on counterterrorism, on service-to-service exercises, further strengthening the friendship and cooperation between the world's two largest democracies," Rumsfeld said. 

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