Australia described Kashmir as a 'major flashpoint' in the Asia Pacific region even as an official White Paper released on Wednesday said the international community has only limited influence over 'intractable tensions between nuclear armed India and Pakistan'.

Releasing the White Paper outlining the country's foreign policy, Australian Foreign Minister Alexander Downer placed Kashmir along with the Taiwan Straits and the Korean Peninsula as three 'major flashpoints'. He, however, did not elaborate.

The White Paper said South Asia poses a particularly difficult challenge for regional security.

"A stable relationship between India and Pakistan is important for the continued successful prosecution of the war against terrorism," it said.

Elaborating on India's growing importance in international affairs, the paper said, "Its military capabilities and economy are growing steadily from a significant base... making it important for us to engage India on strategic matters. The government has expanded the dialogue on military and security issues," the paper noted.

On bilateral ties between Canberra and New Delhi, the paper said both governments are 'committed to developing a more dynamic and forward looking approach to bilateral relationship'.