The Central Intelligence Agency (CIA) arranged for the two South Asian nations to share information on the Pakistan-based militant organization Lashkar-e-Taiba (LeT), widely accused of plotting the November attacks in Mumbai, the Wall Street Journal reported.

A US intelligence official confirmed to AFP that Washington was working to improve cooperation between the two countries.

"The CIA has urged Pakistan and India to share more information on counterterrorism matters, and the agency continues to play a key role in fostering productive exchanges in the months since the Mumbai attacks," said the official, who spoke on condition of anonymity.

The cooperation has also applied to intelligence sharing on Taliban commanders who are leading a mounting insurgency against the Pakistani government, the Journal wrote, citing US officials.

"We have to satisfy the Mumbai question, and show India that the threat is abating," an official involved in Washington's South Asia strategy told the paper.

An official at Pakistan's Inter-Services Intelligence (ISI) spy agency said India and Pakistan had shared "a lot" of information about the Mumbai attack and were now working directly with one another, while keeping the CIA informed.

Although Washington is not "under any illusions" about erasing long-standing suspicious between the two countries, it does see some progress, a US official told the Journal.

In an effort to stress to Islamabad that the Taliban pose a greater threat to Pakistan than its historic foe India, the US government shares information with Islamabad -- and sometimes with India -- about the location of Taliban commanders and their training camps, the report said.

The United States sometimes shares intelligence on Pakistan's efforts in combating militants with India, after obtaining Pakistan's consent, the newspaper said, citing a person familiar with the matter.

Examples of such intelligence includes evidence of progress against militants in Bajaur, the Swat Valley and Buner in Pakistan.

Since independence, India and Pakistan have fought two of their three wars over Kashmir, a divided Muslim majority state claimed by both.

A peace process has been on hold since deadly attacks in Mumbai last November which New Delhi blamed on the Pakistan-based militant group, Lashkar-e-Taiba.

A top Pentagon official said on Wednesday the administration hoped that in the aftermath of elections in India the two governments could resume steps to reduce tensions.

"I would love to see the Indian government and the Pakistan government re-engage in confidence-building measures and discussions about Kashmir and about other areas of difference," Michele Flournoy, undersecretary of defense for policy, told reporters on Wednesday.

"I think there's a lot that can be done to lower tensions and frankly they had done a lot to lower tensions before the Mumbai attacks," she said.

Such an effort "would go a long way to enabling the Pakistan government and military to focus on the most urgent existential threat they face, which is the threat from within," she said.

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