Pakistan holds the key to defusing tensions with nuclear rival India by executing a serious clampdown on Islamic militants, US Director of National Intelligence Dennis Blair said Thursday.

Without such action from Islamabad, President Barack Obama's new chief of intelligence told Congress, New Delhi could feel compelled to ignite a wider conflict in a region already fraught with security risks.

The best efforts of Indian and Pakistani leaders to improve relations "could unravel unless Islamabad takes sustained, concrete, meaningful steps to allay Indian concerns about Islamabad's support to anti-Indian militant groups."

November's bloody terror attacks on Mumbai had laid bare the danger, Blair said in annual testimony to the Senate Select Committee on Intelligence.

"The attack has convinced many Indians that Pakistani military leaders, in an effort to undercut India's emerging international stature, now favor a strategy of allowing Pakistan-based groups to attack targets that symbolize New Delhi's growing prominence on the global stage or that could undermine India's prominence by provoking religious violence in the country," he said.

"In the absence of a military response against Islamabad, the Indian public will look for visible signs that Pakistan is actively working to punish those involved and eliminate its domestic terrorist organizations."

More attacks by "Pakistan-based groups ... run the risk of provoking an India-Pakistan conflict," Blair warned.

"In addition, India, which has endured a series of major terrorist attacks without major military response since 2003, is under domestic pressure to make rapid and significant improvements in its counterterrorism capabilities."

The State Department on Thursday welcomed as "a good step" Pakistan's arrest of six suspects in the Mumbai attacks, adding Islamabad was showing it was serious about cooperating in the probe.