With the United States on the sidelines, Saudi Arabia and the United Arab Emirates are trying to play a role as mediators.

Afghanistan has long been linked to cross-border terrorism. That could prove a major factor if the combatants shift from state armies to proxy militias.

The recent military escalation with arch-rival India won't have a large fiscal impact on Pakistan and can be managed within the current fiscal space, with no need for a new economic assessment, Pakistan's Finance Minister said in an interview with Reuters on Monday.