NEW DELHI, Feb 7: Indian Prime Minister Atal Behari Vajpayee said on Saturday he was confident that ties with Pakistan were set to improve and the resolution of their bilateral disputes would bring peace to South Asia.

"We are confident relations with Pakistan will improve," Mr Vajpayee told an election rally on the banks of the Saryu river in Ayodhya, the site of a bitter religious dispute between Hindus and Muslims.

"We want relations with Pakistan to improve and want to resolve all disputes.

"India was also making efforts to improve ties with China," Mr Vajpayee added.

Cross-border terrorism had been contained, the guns had fallen silent and infiltration reduced, he said.

"War was necessary in Kargil, so we fought a war. If Pakistan wants friendship, we will give friendship," he said, fending off criticism about his government's flip-flop over relations with Islamabad.

"Where war is necessary, we are prepared to fight. But where friendship is on offer, we are prepared to take the road of friendship to solve problems."

Abdout the "hand of friendship" he offered Pakistan on April 18, starting the present peace process, Mr Vajpayee claimed Islamabad was at first "hesitant and reluctant" but later changed its strategy.

"Now we want to resolve all issues through talks. There should be sincerity and a readiness to face dangers."

He spoke about his bus journey to Lahore in 1999, when he had pointed out to Islamabad the futility of fighting wars that cost both countries dearly.

In what was seen as a campaign call for the BJP, Mr Vajpayee enumerated steps his government had taken to strengthen national security and protect India's borders.

AFP adds: "What is to be gained by fighting? We have to fight poverty and unemployment and for that we should utilize our wealth for the development of people. At the same time, we will not lower our guard on the security front," Mr Vajpayee said.

"Today, the image of India overseas is different and there is respect for us. We have opened the opportunity for progress. We hope to make India a developed nation by 2020," Mr Vajpayee said.

Mr Vajpayee said his party remained committed to construction of a Ram Temple in Ayodhya, urging the parties concerned to reach an understanding for its resolution in an amicable and harmonious fashion.

He described the temple construction as an unfinished agenda of his government. "We want that the construction of Ram Temple is completed and all impediments are removed in its way," he added.

He was of the view that the resolution of the Ayodhya issue through a mutual agreement would help foster communal harmony in the country.

On the development front the government, he said had earmarked Rs300 billion for constructing railway lines to connect remote areas and was building the north-south road corridor to link occupied Kashmir with Kanyakumari.

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