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NEW DELHI, India (CNN) -- U.S. President George W. Bush is playing down the prospect of signing a key nuclear pact with India during his four-day visit to the world's second-most populous nation.

The president is being formally welcomed to India Thursday morning at a ceremony at the president palace in the capital New Delhi.

He is then expected to visit a memorial of India's independence leader, M.K. Gandhi, before beginning talks with Indian Prime Minister Manmohan Singh.

A key issue at the talks will be the signing of a pact with India allowing the U.S. to provide expertise and fuel to the nation's burgeoning nuclear industry.

In return, India would open up its civilian nuclear projects to inspection by international inspectors.

Sealing such a deal would be a major achievement for the trip, but on Wednesday the U.S. leader was not considering the pact a fait accompli.

"We'll continue to dialogue and work, and hopefully we can reach an agreement," Bush said Wednesday, according to The Associated Press.

"If not, we'll continue to work on it until we do."

Before Bush arrived Wednesday evening, he made a surprise five-hour stop in Afghanistan where he visited with President Hamid Karzai and spoke with U.S. troops at Bagram Air Base. (Full story)

The visit marks Bush's first trip to India, and U.S. National Security adviser Stephen Hadley described Bush's visit as a historic one in which a "broadening and deepening of the relationship between the United States and India" will be seen.

Before Bush arrived Wednesday evening, thousands of Indian demonstrators chanted anti-U.S. slogans, waved signs and burned U.S. flags to protest the visit.

Bush will also try to soothe tensions between India and neighboring Pakistan, another nation with a nuclear capability.

Pakistan is a key U.S. ally in the war on terror, but many in Washington want to see Islamabad make stronger efforts to dismantle terrorist training camps.

Bush said he would talk to Pakistan President Pervez Musharraf about reports of militants crossing the Pakistan-Afghanistan border.

"These infiltrations are causing harm to friends, allies, and cause harm to U.S. troops," Bush told reporters in Afghanistan. "It's an ongoing topic of conversation."

Under the proposed nuclear deal between New Delhi and Washington, the United States would supply nuclear technology and fuel desperately needed by India to fuel its energy-starved economy.

Despite the potential political fallout, there is a lot to gain for both sides from such a deal going ahead, one analysts said.

"The essence of this strategic partnership is to provide a countervailing influence to China ... to act as a restraint on the exercise of Chinese power," security analyst Brahma Chellaney told CNN.

There is an economic incentive for Washington, as well. A more buoyant Indian economy fueled by U.S. civilian nuclear technology could be good news for U.S. manufacturers eager to sell into India's booming marketplace.

As of July, India had an estimated population of more than 1 billion residents, according to The World Factbook compiled by the CIA.

CNN's Satinder Bindra contributed to this report.