The proposals from Foreign Minister Shah Mehmood Qureshi came as both sides took steps to rekindle relations that had quickly deteriorated following the Mumbai attacks, which India blamed on militants based in Pakistan.

"Dialogue is in the interest of both the countries -- we should sit across the table and also use diplomatic channels" to resolve differences, Qureshi said in a policy statement broadcast live on local television.

"Pakistan wants to make two specific proposals to India to reduce tensions and create a congenial atmosphere," he said.

"India should de-activate its forward air bases and relocate its ground forces to peacetime positions," Qureshi said. "This will send a positive signal and reduce tensions in the region."

Qureshi described developments in the past two days -- such as a hotline conversation between high-level military officials from the two countries -- as "positive".

Officials said here last week that Pakistani troops had been shifted from the tribal areas bordering Afghanistan to the eastern border with India, but an Indian army spokesman told AFP that no troops had been moved on the other side.

India has blamed the banned Pakistan-based militant group Lashkar-e-Taiba (LeT) for the attacks on its financial centre Mumbai, which left a total of 172 people dead, including nine of the 10 gunmen.

New Delhi says Pakistan has not done enough to crack down on LeT in response to the attacks, but Qureshi reiterated that Islamabad would cooperate with India if it provided concrete evidence that Pakistani nationals were involved.

The Pakistani minister said it was India and Pakistan's "duty" to maintain friendly relations "for the benefit of their peoples".

On Monday, Pakistani President Asif Ali Zardari, Prime Minister Yousuf Raza Gilani and the country's powerful army chief General Ashfaq Kayani called for calm with India.

"Pakistan and India need to engage in dialogue to address their differences," Zardari told visiting Chinese vice foreign minister He Yafei.

Kayani also "highlighted the need to de-escalate and avoid conflict in the interest of peace and security" during his talks with the Chinese envoy.

India and Pakistan have fought three wars since independence from Britain in 1947, two of them over Kashmir.

They came to the brink of a fourth war after an attack on the Indian parliament in late 2001 -- a strike New Delhi also blamed on LeT.

Both sides deployed hundreds of thousands of troops to the border but they eventually pulled back following intense international mediation.