"I think the dialogue process has suffered but I won't say it is a setback," Singh told reporters on his way back from an international meeting in Russia.

"I think it is inevitable that in the light of this ghastly tragedy we need to reflect on our relations with Pakistan."

New Delhi has not officially blamed Pakistan-based militants for the seven train bombings in Mumbai last week in which 182 people were killed, but said the attackers received help from "across the border."

Although Pakistan denied the charge, India decided to postpone high-level talks with its neighbour scheduled to begin Thursday to review a slow-moving peace process between the arch-rivals.

Pakistan President Pervez Musharraf said on Tuesday it would be unfortunate if the peace process between the nuclear-armed rivals launched in January 2004 stalled.

"We must not allow such terrorist acts to undermine the historic opportunity for lasting peace between Pakistan and India," the state-run Associated Press of Pakistan quoted him as saying.

Singh told reporters on his plane back from the G8 meeting in Russia that he would like to see the process move forward.

"Anything that gives a setback to that process is not something that makes me happy," he said.

"I have said more than once that the destinies of the people of South Asia are closely interlinked," he said. "Our countries need need peace and stability to realise our developmental potential."

In an interview with the Hindu newspaper published Wednesday, Pakistan Foreign Minister Khurshid Kasuri called on India to stop pointing fingers at Islamabad for every attack on its soil.

"If there's a lead, Pakistan can help. But it has to be a definitive lead, not speculation of this kind within 30 seconds of the incident ... You have violence in India, in Pakistan, Bangladesh, Sri Lanka, Nepal. Therefore, it could well be an Indian phenomenon, purely indigenous. It is unfair to link everything to Pakistan."

Islamabad, Kasuri added, was keeping a close watch on a number of hardline groups but could not simply round up individuals without reason.

"Even in (the) United States and India where you have rule of law, and somebody is not committing a crime, do you simply prosecute on the basis that they are praying five times a day or they have a beard? I mean there has to be some crime committed by them."

He added: "It does not help to simply start finger-pointing ... We should not provide space to people who are against the peace process. If we do they will expand that space for themselves to the detriment of the people of South Asia."

Pakistan and India have fought three wars since independence in 1947, two of them over the disputed Himalayan territory of Kashmir, and came close to a fourth conflict in 2002.