NEW DELHI, Jan 2: India and Pakistan can only settle their struggle over Kashmir if Islamabad gives up its insistence the region belongs to Pakistan because of its Muslim majority, Indian Prime Minister Atal Behari Vajpayee has said.

But in an interview published on Friday on the eve of a visit to Pakistan, the most dramatic sign of progress in a slow, uneasy peace process, Mr Vajpayee said he was optimistic the dispute which brought the two neighbours close to war in mid-2002 could be resolved within his lifetime.

"I remain optimistic about it. But there has to be a fundamental change in Pakistan's perspectives," he told the India Today news weekly. New Delhi has ruled out any substantial bilateral talks with Islamabad on the sidelines of the Saarc summit.

But on Friday, Indian foreign minister Yashwant Sinha did not rule out the possibility of ice-breaking one-on-one talks between Vajpayee and Musharraf or Pakistani Prime Minister Zafarullah Khan Jamali. "We have said that it has not been decided yet," he told reporters in Islamabad. -Reuters