BURNS AND MENON DISCUSS PAKISTAN, AFGHANISTAN, AND

C O N F I D E N T I A L SECTION 01 OF 05 NEW DELHI 008273

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E.O. 12958: DECL: 12/11/2016
TAGS: PGOV PREL PINR PARM PBTS IN PK
SUBJECT: BURNS AND MENON DISCUSS PAKISTAN, AFGHANISTAN, AND
IRAN

REF: NEW DELHI 8191

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Classified By: Charge d'Affaires Geoffrey Pyatt for reasons 1.4 b and d


1. (C) SUMMARY: In a December 7 U.S.-India Strategic
Dialogue working lunch, Under Secretary for Political Affairs
Nicholas Burns and Indian Foreign Secretary Shiv Shankar
Menon discussed:

-PAKISTAN: Menon said that the latest round of Foreign
Secretary-level talks was productive, but Pakistan needed to

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support its anti-terror statements with concrete actions.
Referring to President Musharraf's four-point Kashmir
proposal, Menon declared that there was little new in the
plan, adding that the GOI would rather solve the conflict
step-by-step, starting with confidence building measures
(CBMs) rather than "grand gestures". He emphasized that
resolutions on Kashmir and Siachen will take time. Burns
stated that the U.S. is pressuring Pakistan to do more to
curb terrorism that targets India and working with Pakistan
to eliminate the Taliban threat on the Afghan border. He
expressed Secretary Rice's support for the Composite Dialogue
and U.S. willingness to assist quietly if both sides deem it
beneficial.

-AFGHANISTAN: Burns stressed the USG desire for increased
US-India dialogue on Afghanistan and observed that India
could help the Afghan effort by expanding its humanitarian
and infrastructure assistance there. However, he cautioned
that Pakistan's concern about GOI activities in Afghanistan
is a limiting factor. Menon declared that the GOI was eager
to assist in Afghanistan's reconstruction and has offered
repeatedly to explain its Afghan activities to Pakistan,
which refuses to coordinate.

-IRAN: Burns urged Menon to take a stronger stand against
Iran as the chief financier of Hamas and Hezbollah, a
destabilizing force in the Mideast, and a hostile regime bent
on pursuing its nuclear program. In reference to the Iran
reporting requirement contained in civil nuclear legislation
pending before Congress, he emphasized that U.S. legislators
are extremely wary of any country's policy that permits dual
use technology to flow to Iran. He raised U.S. INPA
sanctions as an example. While noting U.S. concerns, Menon
insisted that the GOI cannot block trade that is not in
conflict with Indian law. Both sides agreed to continue to
communicate their concerns and policy imperatives regarding
Iran. END SUMMARY.

-------------- Pakistan: intensive dialogue with India continues --------------


2. (C) FS Menon began by telling U/S Burns that the Foreign
Secretary-led 13-14 November India-Pakistan talks in New

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Delhi were productive and picked up where the Composite
Dialogue had left off after the Mumbai blasts. He described
the past eighteen months of back-channel and diplomatic
engagement between the two nations as "the most intensive
dialogue since Partition." He claimed that Indo-Pak

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relations posed special challenges, as the GOI is "not
dealing with a unified state that functions as such." He
stated that the GOI was particularly worried about lack of
central government control, especially in three districts of
the Federally-Administered Tribal Areas. He dismissed
Musharraf's claims that he could not control terrorist
activity, citing the security provided to relief workers in
the aftermath of the October 2005 earthquake.


3. (C) Describing the joint mechanism to deal with
terrorism, Menon stated that the GOI had provided Pakistan
with specific names and locations of terrorist cells
operating out of Pakistan, but the Pakistani government has
not taken action against them. "Nothing can compensate for
the absence of will," he said, lamenting that Pakistan "says
all the right things, but now something needs to happen." He
added that India was willing to give the joint mechanism a
chance, and that the rest of the agenda can move forward when
Pakistan takes action against terrorists. Responding to
Deputy Counter-Terrorism Coordinator Virginia Palmer's
questioning about what drives Pakistan's strategic calculus,
Menon assessed that Islamabad's horizons had shrunk, and that
it was focused primarily on domestic considerations.


4. (C) Addressing Musharraf's proposal for Kashmir, Menon
outlined the GOI reaction to Musharraf's four-point plan to
resolve the Kashmir conflict, echoing FM Mukherjee (reftel),
namely that the proposal contained nothing new on borders,
demilitarization or self-governance. He noted that the
United Jehadi Council, politicians and the media are stepping
up criticism of Musharraf. Menon underlined that Pakistan
must define "demilitarization" and "self governance." In
India's view, he said, elections lead to governance,
something we "don't see" in Pakistan.


5. (C) Turning to the Siachen negotiations, Menon claimed
that on several occasions the Pakistani Army nixed deals
which would have required them to verify current military
positions on the glacier. Therefore, the GOI was wary of
"the disconnect between statement and practice." The two
sides did, however, agree upon a joint survey of coordinates
for Sir Creek, and drew maritime boundaries "from the outside
in." He said India was pleased--but would not say so
publicly--by the results of a neutral expert's study of the
Baglihar Dam in Kashmir. As an alternative to sweeping
resolutions to resolve Kashmir, Menon offered that the GOI
preferred a step-by-step approach using confidence building
measures, continued dialogue, and exchanges on a cultural and
human level to overcome differences. Menon theorized that a
joint survey team or panel of neutral experts could reduce
the size of contested land by overlaying opposing maps and
composing a uniform and mutually agreed upon map for
negotiations. He surmised that disputed areas would be
smaller and negotiations could move forward after the
exercise.


6. (C) U/S Burns said that he looked forward to hearing more
specifics regarding India/Pakistan relations after the

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Foreign Minister visits Islamabad in January 2007. He
signaled that the U.S. understands the complexities of
Pakistan and reported that President Bush made the USG's
anti-terror expectations very clear to Musharraf during the
latter's Washington visit. Pakistan's actions against
cross-border terror and the Taliban have become much more
aggressive as a result. Burns assured Menon that the U.S.
continues to pressure Pakistan to do more to counter
terrorism, especially terrorism directed toward India. Burns
also explained that the U.S. and Pakistan are working
together to develop economic zones on both sides of the
Pakistan/Afghan border to promote economic development
(Reconstruction Opportunity Zones). The plan will be
finalized for presentation to the U.S. Congress in early 2007
and entail duty exemptions for the products, including
possibly textiles, produced within the special border zones.
Burns expressed Secretary Rice's support for the Composite
Dialogue and informed Menon that, if requested, the Secretary
was willing to become personally involved in order to advance
Indo-Pakistan relations.

-------------- Afghanistan: India wants intensified coordination with
U.S. --------------


7. (C) Burns stated that NATO forces and the Afghan military
are fighting well against the Taliban, but needed more help
at the provincial level. He described the U.S. commitment to
Afghanistan as solid, and enjoying widespread bipartisan
support. He noted that Pakistan and the U.S./allied forces
are working well together to combat the Taliban along the
Afghanistan border, and that they had increased their
presence outside of Kabul. He said that a significant
investment in infrastructure was needed and urged the GOI to
contribute more and to intensify the U.S.-Indian dialogue in
Afghanistan. However, Burns cautioned, Pakistan's concern
about Indian activities in Afghanistan "is a real limiting
factor." He declared that the U.S. is working to reassure
Pakistan, but India also needed to be transparent in its
activities in Afghanistan.


8. (C) Menon responded that the GOI is eager to participate
in Afghanistan reconstruction and has offered several times
to discuss its ongoing projects with Pakistan and even the
issue of Indian consulates, but Pakistani officials are
unwilling to coordinate efforts. He claimed that Pakistan
looked at Indian activities suspiciously, while the GOI
remained open. Burns pledged to ask Assistant Secretary
Boucher and Deputy Assistant Secretary Gastright to increase
U.S.-India coordination on Afghanistan.

-------------- Iran: different imperatives drive policies --------------


9. (C) Menon asked Burns for U.S. views on the current
situation. Burns replied that the U.S. sees Iran as perhaps
the most dangerous country in the world currently because it
is actively sowing division and using terrorism as a tactic
in Lebanon, Iraq, and Palestine. Burns explained that Iran
is sponsoring a conference denying the Holocaust and

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declaring that Israel should cease to exist. Iran is on the
road to becoming the biggest security concern for the U.S.
and Israel. While the U.S. is serious about pursuing a
diplomatic path with Iran, he continued, it would be
irrational to renounce the possibility of the use of force,
given the stakes involved. Russia and China, he stated, need
to back up their opposition to Iran's nuclear program by
supporting a strong UN Security Council resolution.
Meanwhile, the U.S. Treasury is working to convince European
banks to shut down Iran's money laundering operations and
raise Iran's costs of doing business.


10. (C) Menon remarked that India is not sure of Iran's good
faith in negotiations, citing problems India has had in
getting Iran to abide by its obligations on the Liquefied
Natural Gas deal, the Iran-Pakistan-India pipeline, and
energy cooperation. India must deal with whoever is in
charge in Iran, he said. While the GOI has been clear in its
opposition to Iran's nuclear ambitions, "there are also
limits to what we can do," he underlined, suggesting that
India's cooperation with Iran is driven by a need to
diversify its energy sources. "Pakistan shuts us off from
other (Central Asian) energy sources," he added, "and India
needs energy."


11. (C) Burns underlined the steps the U.S. had taken
earlier this year to convince Iran to negotiate directly on
nuclear issues, noting that Secretary Rice had said she was
willing to participate personally in meetings with Iran. It
is ironic, he said, that others plead with the U.S. to talk
to Iran, while U.S. attempts at dialogue are spurned by
Teheran. He described the strong bipartisan concerns in
Congress about Iran's nuclear ambitions. Regarding the
civil-nuclear agreement, Burns emphasized that the burden
would be on the U.S. to submit reports regarding India's
support for efforts to head off Iran's attempts to acquire
weapons of mass destruction.


12. (C) Raising the Iran Non-Proliferation Act (INPA),Burns
urged Menon to work with the U.S. by preventing Indian firms
from crossing the line on dual-use technology trade, pointing
out that the U.S. had asked India for information regarding
two Indian firms that had been sanctioned by the U.S., but
received no response. "We would like information from you,
to keep communications open," offered Burns. Menon countered
that India does not have leverage over companies that "do not
break Indian laws." He opined that, "adding Iran to the
civil-nuclear agreement makes it particularly sensitive.
Nobody bothers about the fine print, whether the
responsibility (of reporting) is yours or ours, but it gives
our critics one more lever to use and becomes a button they
can press." He noted that he understands Iran is a
politically sensitive issue, and, referring to amendments to
the U.S. bill, commented "we will tell you when it hurts us
and when we think there is a danger." Referring to "the
emotion of Iran as an issue," he argued "if you load (the
civil-nuclear agreement) with Iran, it just makes it harder
(for India to publicly support US efforts on Iran)."

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13. (C) Burns rebutted, stating that Iran has a track record
of violations and readily exploits dual-use technology. He
recommended denying Iran the normal intercourse that a
reasonable state should expect. Steer clear of any military
assistance, he warned, since Iran is colliding with those who
want to resolve the problems of the Middle East. Iran will
be increasingly isolated, he predicted. "We want a
reasonable solution, a reasonable outcome," replied Menon,
claiming "that's a call each country needs to make on its
own."


14. (U) This message was cleared by Under Secretary Burns
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