Analysts say the mood has changed from the heady optimism three months ago when leaders of the nuclear-armed neighbours declared the peace process aimed at ending nearly 60 years of mutual hostility "irreversible."

Fuelling tensions at Friday's talks on confidence-building measures (CBMs) involving nuclear and conventional arsenals will be Islamabad's unhappiness over a US decision last month to share nuclear technology with India.

"Pakistan's reaction has not been very positive and that is a major factor to be taken into account when dealing with nuclear CBMs," said Kalim Bahadur, who teaches Asian studies at New Delhi's Jawaharlal Nehru University.

"Pakistan's position also is it should have arms parity with India in spite of the vast differences in population and economies," he said.

New Delhi has rejected such proposals on the grounds Pakistan's arsenal buildup targets India specifically. India says it does not base its defence capacity on any country or threat and "does not want to be restrained in developing its arms capability," Bahadur said.

On the table will be draft agreements thrashed out last year to set up nuclear hotlines and early notification of missile tests. India and Pakistan, which often test-fire nuclear-capable missiles, already have an informal deal to warn each other before such tests but have been seeking to make it formal.

"But even on these it will be very difficult to reach any conclusion in light of the domestic Pakistan context. This will overshadow the talks," said Bahadur.

Pakistani analysts agreed there was scant chance of progress in the talks.

Pakistan's The News, which usually reflects the views of the Pakistani establishment, reported last month that Islamabad plans to emphasize military balance at the meeting.

"Pakistan will insist on a strategic regime to be put in place which covers the nuclear as well as conventional force balance," said Riffat Hussain, head of strategic studies at Islamabad's Quaid-e-Azam University.

"This will be yet another round of talks without any agreement."

Underlying the chillier atmosphere is the longstanding row over the future of scenic Kashmir which sparked two of three wars between the countries and brought them to the brink of another conflict in 2002.

In Islamabad, irritation is growing with what Pakistan sees as India's reluctance to move decisively to resolve the issue of Kashmir. Islamabad sees such a settlement as central to mending ties.

In New Delhi, after a wave of spectacular militant attacks in Kashmir, Premier Manmohan Singh has been telling Pakistan to rein in militants based on its soil that are fighting New Delhi's rule in the Indian zone of Kashmir.

Still, analysts say the faltering peace process pace does not herald its collapse.

"The desire for peace is there among the people," said Pranay Sharma, foreign correspondent of The Telegraph, based in Calcutta.

Also, both governments are aware of the consequences of a breakdown.

India does not want its economic boom reined in by worries the two nations are sliding toward nuclear armageddon.

Pakistan President Pervez Musharraf "is facing a lot of problems with Al-Qaeda regrouping, Islamic extremism. Also the London bombings have brought the focus back on him," Sharma said.

"This not the right time for him to break away from the talks process."

Mindful of these concerns, Musharraf and Singh agreed in a telephone conversation last weekend to "eschew statements" that "vitiate" the peace process, news reports from Islamabad said.

While Pakistan is unhappy over the nuclear deal, "it knows, despite being a close US ally, it can't get what India is getting after the Khan episode," said Sharma, referring to the scandal in which the architect of Pakistan's nuclear capability, Abdul Qadeer Khan, sold atomic secrets to Iran, Libya and North Korea.

"They may bargain for more debt write-offs or other things but they have to grudgingly accept what India got," Sharma said.

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