Mumbai — President Barack Obama on Sunday touched on the sensitive topic of Pakistan during a question-and-answer session with Indian students, defending the U.S. alliance with India's bitter rival and saying Pakistan is making slow progress in rooting out terrorists.

He implored Indians to find a way over time to trust Pakistan and help it succeed, saying, "If Pakistan is unstable, that's bad for India."

His comments came in response to a question about Pakistan during a free-flowing town-hall style event with about 350 university students in a sweltering courtyard at St. Xavier's College in Mumbai. He then flew to New Delhi for official visits with government leaders.

India and Pakistan have fought three wars since their tumultuous founding in 1947, and the animosity between the rival nuclear nations is palpable. India constantly prods the United States to take a more aggressive role in pressing Pakistan to deal with anti-Indian militants that receive sanctuary in Pakistan and blames Pakistan for the Nov. 26, 2008, attacks in Mumbai that killed 160 people.

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Balancing relations between the rival powers is a delicate one for Obama. The American president needs cooperation from both countries to extricate the United States from a decade of war in Afghanistan, which has increasingly become a proxy battleground for India and Pakistan.

The dialogue between the students and the U.S. president covered everything from terrorism to Gandhi to democracy and the morality of capitalism and was carried live in its entirety and broadcast throughout the day on cable television in India.

First Lady Michelle Obama had introduced her husband, egging on the students to "ask my husband some tough questions, alright? You've got to keep him on his toes!"

With expanding trade the focus on his visit here, Obama didn't mention Pakistan in his remarks Saturday honoring victims of the 26/11 attacks, but on Sunday he acknowledged to the students that he had considered a question on the subject inevitable.

Students also grilled him on his views about jihad (he said he believes most Muslims are peaceful and that terrorists must be isolated) and about Afghanistan (he insisted that a stable Afghanistan is achievable).

One asked how he incorporates the ideals of India's founder, Mohandas K. Gandhi, into his life. He said he often fell woefully short of the icon but that in his daily life and his policy goals he looks to see the inherent worth and dignity of every individual.

Another asked about the balance of moral values and materialism. "We should not underestimate how liberating economic growth can be for a country," he said, but that a quest only for wealth shows a poverty of ambition.

One student asked how the recent U.S. elections in which Americans punished Obama's fellow Democrats might affect economic policy with India. Obama suggested the shift of control in the House of Representatives wouldn't inherently affect India. His broader prediction was for a tug of war within the United States between those that see globalization as a threat and want to retrench and those who accept that we live in an open and integrated world.

He said Americans are still coming to terms with the fact that rising economies such as China, Brazil and India are testing U.S. dominance. That competition, he said, also means the U.S. has to demand more reciprocity in trade relationships.

But it was the discussion of Pakistan that hushed the crowd.

Obama said Pakistan is strategically important to the United States, but that extremism there is a cancer …that can potentially engulf the country.

"I think the Pakistani government understands now the potential threat that exists within their own borders," he said, but added, "Progress is not as quick as we'd like."

"Our feeling has been to be honest and forthright with Pakistan, to say we are your friend, that this is a problem and we will help you but the problem has to be addressed."

Many of the students in the audience said afterward that they believe ill will between Indians and Pakistanis is to some extent generational and is easing with time.

"Today's generation is beyond that so in the near future there can be trust," said Divya Moorjaney, 20.

Omkar Khare, 18, a physics student in the audience, said he's most interested in what the United States can do to curb terrorism than in blaming Pakistan's government.

Since the Mumbai terrorist attacks two years ago, he's lived with the realization that "Any day there can be a bomb."

Just before the town hall, Obama visited two expos at the campus, one on agriculture and food security, the other on anti-corruption and government accountability projects.

The president began the morning at a high school in Mumbai, where, buckling to pressure from schoolchildren, did some awkward synchronized dancing, lit a Diwali alter and saw presentations on the environment.

One boy told Obama that "We Indians believe Lord Rama created the earth. It is we, man, that are destroying it," and then handed the president a mirror to see his own reflection.

In an auditorium ringed with flowers and stringed lights, children dressed in brightly-colored traditional Koli clothes and the president and first lady used candles to light the Diwali alter, while a girl explained the festivals celebration of light over darkness.

A synchronized dance celebration commenced. Michelle Obama jumped in — a natural. The president resisted but finally gave in as the children literally dragged him out to join them.

(Dion Nissenbaum contributed from New Delhi.)

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