The US has said it supports a direct dialogue between India and Pakistan as outlined in the Shimla Agreement, asserting that the 'chief obstacle' to the talks remain Islamabad's continued support to extremist groups that engage in cross-border terrorism.

'We believe that direct dialogue between India and Pakistan, as outlined in the 1972 Shimla Agreement, holds the most potential for reducing tensions,' acting assistant secretary of state for South and Central Asia Alice G. Wells told the subcommittee on Asia, the Pacific, and nonproliferation of the House Foreign Affairs Committee.

She said during 2006-2007 backchannel negotiations, India and Pakistan reportedly made significant progress on a number of issues, including Kashmir.

'History shows us what is possible,' Wells said on Monday in a prepared statement submitted to the Congressional subcommittee on the eve of the hearing 'Human Rights in South Asia: Views from the State Department and the Region'.

'Restarting a productive bilateral dialogue requires building trust, and the chief obstacle remains Pakistan's continued support for extremist groups that engage in cross-border terrorism,' she said.

The United States, Wells said, welcomes Prime Minister Imran Khan's recent unambiguous statement that terrorists from Pakistan who carry out violence in Kashmir are enemies of both Kashmiris and Pakistan.

'Pakistan's harbouring of terrorist groups like Lashkar-e- Taiba and Jaish-e-Muhammed, which seek to foment violence across the Line of Control, is destabilising, and Pakistani authorities remain accountable for their actions,' she said in a warning to Pakistan.

'We believe the foundation of any successful dialogue between India and Pakistan is based on Pakistan taking sustained and irreversible steps against militants and terrorists in its territory,' Wells said.

Both US President Donald Trump and secretary of state Mike Pompeo have met and spoken with their Indian and Pakistani counterparts multiple times, including at the recent United Nations General Assembly, to encourage dialogue, she told the lawmakers in the prepared statement.

Observing that the security situation in Kashmir remains tense, Wells said clashes between youth and security forces are a regular occurrence, and that the Indian forces killed suspected terrorists in multiple firefights last week.

'We are concerned about reports of local and foreign militants attempting to intimidate local residents and business owners in order to stymie normal economic activity. The United States supports the rights of Kashmiris to peacefully protest, but condemns the actions of terrorists who seek to use violence and fear to undermine dialogue,' she said.