Powell: U.S. committed to Asian stability

Praises results of South Asia peace efforts

Powell said South Asia still faces the threat of war

NEW YORK (CNN) -- U.S. Secretary of State Colin Powell says intensive diplomatic efforts to avoid war between nuclear rivals India and Pakistan have begun to pay off, but that Washington will remain engaged with both sides to find a way to build a lasting peace.

"We have begun to see some relaxation in the tension," he said Monday in a speech to the Asia Society's annual dinner in Manhattan.

However, he noted the threat of war remained and the region still faced a "period of crisis."

"The Bush administration has been hard at work on this for a number of months -- phone calls, emissaries, consultations with other world leaders [have], I think, started to produce some results," Powell said.

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In recent weeks, he said, Washington had worked closely with the European Union, the United Nations, Russia, China and Britain to tell both sides "that a way must be found to solve this crisis quickly, without conflict."

He noted that the rate of shelling on both sides had abated and that India has just reopened its air traffic corridors with Pakistan and pulled back its naval fleet from potential confrontation.

"Pakistan has welcomed these moves, and I expect tomorrow President [Pervez] Musharraf will give us further indications of how welcome these moves are," Powell said.

Powell said the diffusion of tension was "progress" -- but he added there was still a long way to go and the situation remained "very tense."

"The United States will remain engaged to find a way forward that will lead to stability and peace and not to war," he said.

Support for Afghan freedom

Tens of thousands of troops remain in a tense stand-off along the Kashmir Line of Control

In a speech designed to underscore the United States commitment to Asian security and stability, Powell also focused on Afghanistan and the continuing operation to hunt down the remaining al Qaeda and Tailban operatives in the war-torn country.

As Afghan leaders begin the process of rebuilding their homeland, he said the U.S. would concentrate efforts on supporting political freedom in Afghanistan.

He pointed to American contributions of some $296 million in 2002 toward the total $4.5 billion in rebuilding funds promised by 60 nations at a conference earlier this year in Tokyo.

"Nation after nation pledged they would never again abandon Afghanistan back to chaos and terror, and I guarantee you tonight, we will not. We will be there for Afghanistan," Powell said.

He praised nations such as Malaysia, Thailand and the Philippines for cooperating with the United States in its war against terrorism, and he condemned extremists who he said were feeding "a popular misconception ... that the global campaign against terrorism is a war against Islam."

"Nothing could be further from the truth. It is not we who threaten Islam. It is the terrorists who murder -- who murder men, women, and children and violate Islam's fundamental precepts of tolerance and peace," he said.

North Korea warned

Powell says North Korea must stop producing missiles and focus on feeding its people

His speech also had sharp words for North Korea, one of three countries President Bush labeled in January as part of an "axis of evil" that threatened world peace.

Powell said the North Korean leadership's "dangerously deluded policies," have led the regime there to produce "missiles of mass destruction instead of food for their people."

Despite this, Powell said the United States would remain the largest humanitarian aid donor to North Korea but would also maintain its 37,000 troops along the demilitarized zone with South Korea to provide security.

He said North Korea as well as China must fulfill pledges against the proliferation of missile technology.

Dividends

Focusing on the economic front, Powell said the American security presence in Asia had paid dividends in growing economic ties across the continent, with two-way trade rising to $700 billion annually -- more than between the United States and Europe.

In the past decade, U.S. exports to Asia went up 80 percent and U.S. imports by double that amount, he said.

Even in China, the world's fourth largest trading power after the European Union, the United States and Japan, Powell said, "market dynamism has replaced dogmatism."

Powell also commented on how much the U.S.-Asia relationship had changed since he first went there, arriving in Vietnam in 1962 as an army captain fighting a communist takeover.

At the time Vietnam was perceived in Washington as a key link in what became known as the 'domino theory' of communist takeovers in Southeast Asia.

Now, he said, the region has gone "from dominos to dynamos and dynamos to democracies."