By Tommy Wilkes

ISLAMABAD (Reuters) - Saudi Arabia's foreign minister arrived in Pakistan on Thursday, where he met Prime Minister Nawaz Sharif, who is keen to use the two-day visit to defuse spiraling sectarian tension between the Sunni-majority kingdom and Shi'ite Iran.

Saudi Arabia's execution of a prominent Shi'ite cleric on Saturday inflamed tension across the Middle East and infuriated Iran, Riyadh's main rival in the region.

Several of Saudi Arabia's Sunni allies have broken diplomatic ties with Iran after demonstrators ransacked the Saudi embassy in Tehran this weekend.

Pakistan, which borders Iran and has a large Shi'ite minority, has sought to avoid taking sides as Sharif tries to stem sectarian violence at home and boost economic ties with both Saudi Arabia and Iran.

"Pakistan expressed deep concern at the escalation of the situation and condemned the burning down of (the) Saudi Embassy in Tehran," Sharif's office said in a statement.

"The Prime Minister called for (the) resolution of differences through peaceful means in the larger interest of the Muslim unity."

Saudi Foreign Minister Adel al-Jubeir also met army chief General Raheel Sharif and Sharif's foreign affairs adviser Sartaj Aziz.

The visit comes after Pakistan last month distanced itself from an anti-Islamic State coalition announced by Saudi Arabia, which had named Pakistan as a member.

Pakistan also declined a Saudi call to join a Riyadh-led intervention, backed by most Sunni Gulf Arab states, in Yemen last year to fight Iranian-allied rebels.

"Pakistan can't afford to provide what Saudi Arabia is looking for," said Mosharraf Zaidi, an Islamabad-based commentator, adding that it had the most of any Muslim nation to lose from a broader sectarian breakdown between Sunnis and Shias.

"The real trick is to find a way to send him (Al-Jubeir) back happy without giving him anything that would upset his Iranian counterpart."

Pakistan wants to deepen trade links with both Iran and Saudi Arabia and improve access to their vast energy resources to fuel its power-hungry economy.

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It hopes to finish a major gas pipeline to Iran if sanctions imposed over Iran's nuclear program are lifted.

But Pakistan and Saudi Arabia have cultivated a close alliance for decades, and Sharif spent time in political exile in Saudi Arabia in the 2000s, after he was ousted in a military coup.

In 2014, Saudi Arabia gave Pakistan $1.5 billion as a "gift" to shore up its foreign reserves.

(Reporting by Tommy Wilkes; Editing by Katharine Houreld and Catherine Evans)