"I think what we are looking to see is a strategy that returns Kashmir to what prime minister laid out in his August speech, which is full restoration of political life, of political status, of engagement and dialogue taking place with Kashmiri leadership," she said while replying to a reporter's question at a briefing here on Friday.
"We always support the right of peaceful protest and assembly. We continue to support that right with an emphasis on 'peaceful'. And we look forward, again, to seeing a return to normalcy in Kashmir."
US President Donald Trump "has been deeply engaged" through meetings and in phone conversations with Modi and Pakistan Prime Minister Imran Khan with whom he has good rapport, she said.
Trump speaks "quite openly about his concerns over the level of tension between the two countries, particularly between two nuclear powers; his desire to see those tensions reduced; his willingness to play whatever positive role he can, including mediation if he were to be asked to do so", Wells said.
"While certainly the disagreement is continuing between India and Pakistan, our ability to engage with the leaders and our willingness to engage with the leaders and their receptivity to our engagement is positive," she added.
About the possibility of the two neighbours settling their differences, she said: "What we have to focus on is like can we achieve confidence that non-state actors are no longer afforded sanctuary and able to operate in the region, can we achieve confidence that the - that both sides are committed to a constructive dialogue. And when those - when the confidence emerges, I think then the dialogue will follow.
"We will do whatever we can to try to help promote greater confidence between the countries, but practical steps have to be taken."
(Arul Louis can be contacted at arul.l@.in and followed on Twitter @arulouis)
( With inputs from IANS )