"It is clear we have to do what we can to support the process of reconciliation underway between the two nuclear powers, India and Pakistan," Danish Foreign Minister Per Stig Moeller was quoted as saying in the Berlingske Tidende daily.

Indian Prime Minister Atal Behari Vajpayee and Pakistani President Pervez Musharraf held their first talks since nearly going to war in 2002 on the sidelines of a seven-nation summit Monday, with further dialog between the two countries expected to get underway next month.

"Peace is obtainable only if Pakistan is a stable country. Therefore President Musharraf must have our support, also economic if needed," said Moeller.

He said it was still unclear if Denmark would provide aid to Pakistan alone or through the European Union.

Aid to Pakistan would also help prevent the collapse of the country and prevent it becoming, like Afghanistan and Sudan, a refuge for Islamic extremist groups.

"President Musharraf has come under strong pressure from Pakistani Islamists, and he escaped two assassination attempts before Christmas. And as the country has nuclear weapons, it is clear that it must not collapse," said Moeller.

WAR.WIRE