NEW DELHI, India (AP) _ Secretary of State Colin Powell said Friday he believed India and Pakistan were pulling back from the brink of war with actions that would lead to dialogue.
Powell, concluding a three-day South Asian mission to urge the nuclear-armed rivals to end their monthlong standoff, said leaders of both countries had assured him that dialogue was possible if certain steps were taken.
``I leave here very encouraged that we can find a solution to this troubling situation,'' Powell told a news conference after meeting with Indian Prime Minister Atal Bihari Vajpayee, Foreign Minister Jaswant Singh and other officials.
``I think we are on a path that could lead to the restoration of dialogue,'' Powell said. ``But it will take further action before we can really start walking down that path more aggressively.''
As Powell made his remarks, Pakistan's President Gen. Pervez Musharraf said for the first time in the standoff that he thought war could be avoided, but warned Pakistan would respond strongly to any attack.
``I am confident that ... there won't be a war. We don't want war,'' Musharraf told a gathering of Pakistan's top clerics in the federal capital. ``But if war is imposed on us, we are ready to ... fight with all our might.''
Powell met with Musharraf in Islamabad on Wednesday before arriving in the Indian capital on Thursday. He flew to neighboring Nepal on Friday, where he is expected to pledge U.S. aid for the Himalayan kingdom's fight against Maoist rebels.
India and Pakistan have massed hundreds of thousands of troops on their border since a Dec. 13 attack on the Indian Parliament, which New Delhi blamed on Pakistan-based Islamic militant groups and Pakistan's spy agency. Pakistan has denied involvement.
In his remarks in Islamabad on Friday, Musharraf said he didn't believe the latest tensions would spark a fourth war between the longtime rivals, but reiterated that his armed forces were fully mobilized.
``There should be no doubt that the army has the capability and power not just to defend the country but also to counterattack,'' he said, calling Pakistan's military strength a ``guarantee of peace.''
Powell said India had delivered more evidence to Pakistan about 20 men believed to be living in Pakistan who are accused of terrorist acts in India. India wants the men handed over for prosecution.
The names on the list include Dawood Ibrahim, chief suspect in a 1993 blast at the Stock Exchange and Air India building in Bombay; Masood Azhar, a terrorist suspect released from an Indian prison in exchange for the release of hostages aboard an Indian Airlines aircraft hijacked on Christmas Day 1999; and those allegedly involved in attacks in Punjab and Jammu-Kashmir states.
Musharraf has said he will never hand over Pakistanis, but left open the possibility that some of the 14 Indians on the list could be extradited.
``He doesn't rule out appropriate action against those non-Pakistanis who are on that list of 20,'' Powell said, adding that ``more information was given to them and to us.''
``We hope that President Musharraf will examine all the information and do what is the appropriate thing to do in the case of each one of those 20,'' Powell said.
The secretary of state lauded Musharraf for a speech last weekend condemning terrorism and vowing to curb Islamic militants who launch attacks against India.
Musharraf said he would not allow militants to conduct terrorist acts in the name of Kashmir. However, he said his country would continue to support their claim of independence for India's only Muslim state, or a merger with Pakistan.
In his speech, Musharraf announced a ban on five groups, including Islamic and Kashmiri militants. Nearly 2,000 suspected militants have been arrested in a nationwide crackdown.
Singh, who addressed the news conference with Powell, said India ``welcomed'' Musharraf's remarks, but was still waiting for more action on the ground. Only then, he said, would New Delhi consider pulling back troops from their border.
``There has already been some action, which India has welcomed,'' Singh said. ``And if there is action in regards to the 20 wanted terrorists and criminals, then I am very hopeful that we would seek movement toward a situation similar to what it was before the 13th.''
India and Pakistan have fought two of their three wars over the Himalayan province of Kashmir since independence in 1947. India accuses Pakistan of fighting a proxy war by funding and arming more than a dozen Islamic militant groups in Indian-controlled Kashmir. The 12-year insurgency has cost more than 32,000 lives.
A so-called ``Line of Control'' divides Kashmir between the two countries, with two-thirds in India and the remainder in Pakistan.
After the suicide attack on India's Parliament, in which 14 people were killed including the attackers, cross-border shelling escalated and dozens of civilians have been killed. Tens of thousands of villagers have been displaced on both sides.