Obamas celebrate Diwali

First lady Michelle Obama turned in an enthusiastic performance of the Kholi dance. "She was moving," the president said of his wife later. (EPA)

President Obama, challenged by Indian students Sunday to explain why the United States had not labeled Pakistan a terrorist state, defended his administration's efforts to help the Pakistani government root out extremism and urged Indians to remember their own stake in promoting their longtime rival's stability.

Obama's call to India for a gradual rapprochement with Pakistan, made during a sometimes lively town hall-style meeting at St. Xavier's College in the Indian city of Mumbai, is likely to be repeated at a speech Monday to the Parliament in New Delhi.