"Both the countries must now undertake a sequenced series of actions to rebuild confidence and cooperation. Such actions must include progress by Pakistan to prosecute those responsible for the Mumbai attacks and concerted efforts to stop militant infiltrations across the Indo-Pak border," Assistant Secretary of State for South and Central Asia Robert Blake said.
He said "in response, India has indicated it is prepared to restart confidence building measures".
Addressing students at the Paul H Nitze School of Advanced International Studies of Johns Hopkins University, Blake said, "An important part of a successful strategy in Afghanistan and Pakistan will be for New Delhi and Islamabad to restore relations to the levels of cooperation they enjoyed between 2004 and 2007".
Recalling the progress made during that period, Blake said, "Beginning in 2004, President Pervez Musharraf met then Prime Minister Atal Bihari Vajpayee and pledged that Pakistan would not let the territory under its control be used to support terrorism".
He said "that pledge provided the basis for the two countries to undertake a series of confidence building measures through a composite dialogue between the foreign ministries".
Regretting that the confidence building measures were frozen following the terror attacks on Mumbai in November last year, he said, "But to their credit, both countries continued political-level talks, the most important of which was a meeting between prime ministers Manmohan Singh and Yousuf Raza Gilani in Sharm el-Sheikh on July 16".
Noting that bilateral commerce between India and Pakistan was only slightly more than $2.1 billion, Blake pointed out that trade between China and Indonesia, two countries of roughly comparable sizes which do not enjoy the benefit of a common border, is approximately $30 billion.
"This provides some indication of the immense potential to expand trade between India and Pakistan," he said.
'Pak not serious about punishing 26/11 terrorists'
Finally, Pak shares information about 26/11 probe
Pakistan fires 26/11 prosecutor
India could have avoided 26/11 attack: Pak
Can Pakistan meet India halfway on 26/11?