Indian commandos assemble on the terrace of the Nariman Bhavan as they prepare an assault in Mumbai yesterday. Indian newspapers have slammed the government and intelligence agencies for failing to prevent the Mumbai attacks, saying the country's anti-terrorism forces were ill-prepared for attacks. Photo: AFP

The Mumbai terror attacks threaten to chill improving ties between nuclear-armed rivals India and Pakistan just as the West is trying to get Islamabad to focus on al-Qaeda and Taliban close to the Afghan border.

India has not singled out Pakistan as being linked to the strikes, but Indian Prime Minister Manmohan Singh on Thursday said militants based outside his country carried them out.

That was widely understood in Pakistan to be an accusation of its involvement.

Defence Minister Ahmed Mukhtar said Pakistan "should not be blamed like in the past."

"This will destroy all the goodwill we created together after years of bitterness," he told The Associated Press. "I will say in very categoric terms that Pakistan is not involved in these gory incidents."

Deteriorating relations between Pakistan and India, which have fought three wars since 1947, would greatly complicate US foreign policy in the region.

Incoming President-elect Barack Obama has said normalising ties between the two South Asian neighbours will be a major plank of his broader campaign to stabilise Afghanistan and beat al-Qaeda in the region.

"You can't cozy up to a country that is accusing you of complicity in terrorism," said Shaun Gregory, an expert on South Asian terrorism at the University of Bradford in Britain. "Any sign of Pakistani involvement would be extraordinarily damaging."

On Friday, Pakistani Prime Minister Yousuf Raza Gilani called his Indian counterpart and pledged his government's "full support to jointly combat extremism and terrorism," Gilani's office said.

US Secretary of State Condoleezza Rice telephoned Pakistani President Asif Ali Zardari late Thursday to discuss ties and the regional situation, the Associated Press of Pakistan reported.

In 2001, militants fighting Indian rule in the disputed Himalayan region of Kashmir attacked Parliament in New Delhi, helping push the countries to the brink of war a year later.