India and Pakistan, which have gone to war three times since independence in 1947, are trying to re-invigorate a sluggish four-year-old peace process.

Both are also desperate to tie up future energy supplies to fuel their fast-growing economies, but the United States has tried to discourage any deal with Iran because it suspects Tehran is trying to build nuclear arms.

"It can be a pipeline of peace and new bondage," Shah Mehmood Qureshi, on a three-day visit to India, told a news conference.

"The IPI (Iran-Pakistan-India) gas pipeline is to our mutual benefit. Both sides stand to gain."

India has been cautious about the $7.6 billion pipeline project, triggering a pledge from Iran and Pakistan to press ahead without Indian participation.

Analysts say New Delhi wants to reduce the risk of supplies being cut during times of tension with Pakistan and is under pressure from Washington to back down from the deal.

India had missed a meeting in September, citing issues including transit fees and transportation tariffs with Pakistan. India has disagreed over the delivery point of the gas -- the point where India takes control of supplies.

Officials from India, Pakistan and Iran will meet next month in Tehran over the pipeline.

"We are hopeful that it will be possible to resolve this issue both from technical, commercial and all aspects," India's Foreign Minister Pranab Mukherjee said.

Better Ties

Work on the pipeline could begin next year and is due to be finished by 2012. It would initially transport 60 million cubic metres of gas (2.2 billion cubic feet) daily to Pakistan and India, half for each country. The pipeline's capacity would later rise to 150 million cubic metres.

Pakistan's new civilian-led government has high hopes of building better relations with India and the pipeline is seen as a platform for mending ties.

The nuclear-armed rivals began a peace process more than four years ago, having gone to the brink of a fourth war in 2002, but had been in a lull because of political turmoil in Pakistan.

"The political environment to make the peace process result-oriented is right on both sides," Qureshi said.

"We must not miss this opportunity. It would be great loss." No reference was made to the Kashmir issue.