NEW YORK, Feb 21: US Secretary of State Colin Powell said on Friday the United States, acting in partnership with others, had played a quiet but important role in the reconciliation process recently launched between India and Pakistan , and expressed the hope that both countries were moving towards a lasting peace in the Subcontinent.

He was speaking to faculty members and students at a day-long conference at the Princeton University marking the 100th birthday of George F. Kennan, the US diplomat credited with devising the policy of containing the Soviet Union during the Cold War.

Mr Powell observed: "The Pakistani and Indian leaderships both have now decided let's talk to each other, let's move forward."

"We hope they have now turned the corner and are moving down a road towards a lasting peace on the Subcontinent," he added.

"The political negotiations will begin well - will begin soon, and we hope they go well. Political dialogue and genuine conciliation mark the way forward in this new era," the US Secretary of State observed.

He said: "18 months' ago, one of the great concerns I had as a Secretary of State was that a war might break out between these two countries, a war that could possibly go nuclear, since both have nuclear capability," Mr Powell noted.

"We have seen all sides sobered by that possibility of war, and instead they are moving in the other direction."

On the involvement of Pakistan's nuclear scientist Dr Abdul Qadeer Khan in proliferation activities, Mr Powell praised steps taken by President Pervez Musharraf.

"President Musharraf of Pakistan has done the right thing now to get firmer control over Pakistan's technological assets.

"The international web of proliferation that Dr A.Q. Khan used to traffic with Libya, with Iran, with North Korea is being shut down even as I speak," he declared.

Taking questions from the audience, Mr Powell was confronted with an accusation that the administration had a double-standard of demanding the Palestinians end terror but letting Israel terrorize and kill them he prodded Israeli Prime Minister Ariel Sharon to permit Palestinians to live a better life.

But he also blamed Yasser Arafat for sabotaging US efforts to stop Palestinian terror attacks on Israelis.

"I put the blame squarely on Arafat," he added.

Mr Powell cited President Bush's support for creation of a Palestinian State and US demands that Israel stop expanding Jewish settlements on the West Bank and get rid of outposts there.