ISLAMABAD, Feb 16: Pakistan and Malaysia on Wednesday agreed that all countries of the region, including Pakistan and India, should seek peaceful resolution of their regional issues, including the dispute of Jammu and Kashmir.

The agreement emerged at a meeting between delegations of the two countries' led by Prime Minister Shaukat Aziz and Malaysian Prime Minister Dr Abdullah Badawi at the PM House.

Earlier, the two leaders had a one-to-one meeting for about half an hour during which they discussed matters of mutual interest, covering a range of issues - economic, regional and international.

In their joint appearance before the press corps, the two leaders said they had agreed to expand and deepen bilateral political and economic ties and work for the restructuring of the OIC so that it projected a true picture of Islam.

About the OIC's position on Iran-UN standoff on the nuclear issue, the Malaysian prime minister said his country had friendly relations with Iran and wanted to see all issues, including the nuclear imbroglio, resolved amicably and in a spirit of understanding.

Asked as to how the OIC was tackling the matter of proposed UN reforms, he said the grouping had a continuous process of consultations through its caucus in New York and elsewhere and UN reforms was one subject which was being discussed by its member states.

Mr Aziz apprised his Malaysian counterpart of developments in the region and Pakistan's relations with its neighbours, including India. He also briefed Mr Badawi on the ongoing composite dialogue with India and Pakistan's quest for the resolution of the core issue of Kashmir.

He apprised him of Pakistan's principled position on Kashmir and its desire to get the dispute resolved in an honourable way acceptable to the people of Kashmir.