Tony Blair has hailed the "liberating" role played by religious belief and called for greater understanding between those of different faiths.

The prime minister was among the speakers at an international conference seeking to "build bridges" between Christians and Muslims.

The two-day seminar, being held at Lambeth Palace and hosted by Archbishop of Canterbury George Carey, is seeking ways of "overcoming obstacles in Christian-Muslim relations".

Blair acknowledged that religion can be misused, explaining: "Religious values can be warped or perverted but when people are true to its real value religious faith can be immensely liberating."

And he added that extremists could be defeated through interfaith dialogue. "One of the things that put them on the defensive and put moderates on the offensive is greater understanding of faith," he said.

"What needs to be globalised is knowledge and understanding. It is knowledge that gives us foresight and helps people realise what they have in common. It is knowledge and understanding that brings people together rather than sets them apart - that is why the dialogue that we are having today is so important."

Following the prime minister's recent visits to the Middle East and the Indian sub-continent, and his insistence that the "war on terrorism" is not a conflict between the West and Islam, his remarks are certain to give the event a high profile.

Prince Hassan of Jordan will also address the meeting of 40 priests, academics and lawyers from the US, the UK, Africa and the Middle East, and the leader of Roman Catholics in England and Wales, Cardinal Cormac Murphy-Connor. The prime minister's unofficial "faith tsar", John Battle, will also be among the observers.

Speaking ahead of the seminar, Dr Carey said the event could help to promote understanding.

"This seminar which we have convened, which is bringing together some very exciting scholars around the world, I think can do a great deal in achieving the understanding which we believe is desperately needed in our tortured and unstable world," he told BBC Radio. "Both faiths have great strengths, we must listen to each other."

Questioned on whether he would advise Christians to read the Koran, Dr Carey said: "I wouldn't say it in quite that way. I would want to say to Muslims to read the Bible, I would want to say to Christians to understand the Koran, I believe it is a necessity in our day and age to understand one another. Why shouldn't I read to Koran in order to understand another faith better?"