Fears of war between India and Pakistan have dominated talks between Tony Blair and US Defense Secretary Donald Rumsfeld.

Downing Street said the two men had expressed deep concern about the military mobilisation on both sides in the crisis over the disputed Kashmir territory.

The situation ... between India and Pakistan is a dangerous situation

Donald Rumsfeld

Defence Secretary Geoff Hoon, who also held talks with Mr Rumsfeld, said the pair had "compared notes" on the tensions between India and Pakistan and will "continue to work closely together to try to reduce those tensions".

He said both sides had to "step back from the brink" of war and be prepared to discuss issues around Kashmir.

Mr Hoon said it was "certainly encouraging" that Indian Prime Minister Atal Behari Vajpayee has said that India would consider monitoring the disputed border in Kashmir jointly with its rival Pakistan.

'Sophisticated leaders'

Mr Rumsfeld insisted that the situation between the nations was "dangerous", but acknowledged that both sides had been trying to damp down the crisis.

Hoon: The Pakistan-India crisis is 'rapidly changing'

He told reporters at the Ministry of Defence: "There is no question that when you have two nations that have nuclear weapons and the situation is as it is between India and Pakistan, it is a dangerous situation."

Mr Rumsfeld said Mr Blair, the United States and Russian president Vladimir Putin were "anxious to work with these two countries so that in fact the tensions are some what relieved rather than made worse".

The US Defense Secretary said Mr Vajpayee and his Pakistani counterpart, President Pervez Musharraf, were "sophisticated and knowledgeable people".

The pair and the world had an interest in "not allowing the situation to escalate into a conflict", he said.

Liberal Democrat foreign affairs spokesman Menzies Campbell said a clear message was needed that India and Pakistan must draw back.

If Britain and the US were unable to get Pakistan and India to the negotiating table, then Russia and China should try, said Mr Campbell.

'Untidy world'

On Iraq, Mr Hoon said he and Mr Rumsfeld believed that the country would be "a much better place" if Saddam Hussein was "no longer in power".

The future of Nato was also discussed during the talks amid concern from some European governments that the US is losing interest in the alliance.

Mr Rumsfeld fired a warning shot that Nato nations would have to increase their defence budgets, but joked: "I hate to fuss at folks, I really don't, but we live in a dangerous and untidy world."

On Thursday, Mr Hoon and Mr Rumsfeld are attending a Nato defence meeting in Brussels this week.

Nato role

The future of the alliance will be discussed at the upcoming summit of Nato leaders in Prague.

Article five of the Nato constitution - meaning an attack on one member is seen as an attack on them all - was invoked for the first time after 11 September.

But the alliance's role in the war against terror has been minimal and some European governments have been worried America is losing interest in Nato.

Mr Rumsfeld also praised the "superb job" being carried out by the Royal Marines in Afghanistan.

Mr Blair also met Egypt's President Mubarak on Wednesday, with the Middle East peace process the main point of discussion.