NEW DELHI, Nov 29 (Reuter) - Chinese President Jiang Zemin held talks on Friday with Indian Prime Minister H.D. Deve Gowda on issues expected to have included a border dispute between the world's two most populous nations.

Officials gave no immmediate details of the talks but they said the frontier dispute and China's military cooperation with Pakistan were expected to have been high on the agenda.

China and India fought a border war in 1962.

Jiang arrived in New Delhi on Thursday for a three-day state visit, the first to India by a Chinese president. He will leave on Sunday for Pakistan, India's traditional rival.

Officials said several agreements were expected to be signed on Friday, including one on further confidence building measures in the military field on the line of control along their 4,000 km (2,500 mile) frontier.

Other agreements were likely to include moves to prevent cross-border crime and drug trafficking and to strengthen shipping services and investment protection.

At a banquet on Thursday, Jiang and Indian President Shankar Dayal Sharma said friendship between their countries, home to one-third of humanity, could be a key to world peace.

"I am convinced that the Chinese and Indian peoples joining together will be a great force and an important guarantee for peace in Asia and the world at large," Jiang said.

Sharma also made an apparent reference to China's friendship with Pakistan, saying New Delhi was concerned by actions that adversely affected regional security.

Pakistan has enjoyed close relations with China since the 1960s. In recent years, the two countries have been accused of secret nuclear and missile deals, which both have denied.

India and China signed an agreement in 1993 to ease tension along their frontier during a visit by former prime minister P.V. Narasimha Rao to Beijing.

In August 1995, India and China agreed to pull back their troops from four border posts in India's northeastern state of Arunachal Pradesh, parts of which are claimed by China.

Sharma said India was prepared to work with China to resolve "outstanding differences" on the boundary issue.

The Indian Express daily said India was believed to have cleared an agreement for a phased withdrawal of troops along the Indo-Chinese border, to be replaced with para-military forces.

"The border dispute is central to problems between the two countries. Confidence building measures already in place appear to be working," one western diplomat said.

"Indian policy makers generally agree that China is a problem to be managed. The strategy is to try to build elements of stability into the relationship that will survive ups and downs and any change in Chinese policy," the diplomat added.

V.V. Paranjpe, a Delhi-based China expert, said: "If they (the Chinese) continue the Maoist line of a pro-Pak tilt and build them up militarily and economically, then not much can be secured."

On Friday, Jiang also met Indian Foreign Minister Inder Kumar Gujral after visiting the Rajghat on the banks of the Yamuna river to lay a wreath to Mahatma Gandhi, India's apostle of non-violence who was assassinated in 1948.

There were several protests by pro-democracy Tibetan exiles in the Indian capital on Friday. On Thursday, exiles burnt an effigy of Jiang and the Chinese flag.

Leaders of the Tibetan Youth Congress said about 14 of their activists were detained by police en route to the Rajghat.

Police said they were unaware of any arrests.

India support China's jurisdiction over Tibet, which Beijing annexed in 1950