NEW DELHI, Feb 25: Prime Minister Shaukat Aziz has urged India to join him in the search for new and innovative ways to resolve old issues that divide the two countries.

"Pakistan has demonstrated that it is prepared to take chances for peace," Mr Aziz, speaking through a satellite hook-up from Islamabad, told an international conclave here on Friday.

He was referring to economic measures, chiefly the gas pipeline project from Iran, as examples of the 'chances' that Pakistan had taken in the hope that India would reciprocate with courageous political gestures, including the will to produce results on Kashmir.

"South Asia faces the challenge of envisioning an alternate future for itself," Mr Aziz said. "Fundamental changes in both thinking and behaviour necessitate making bold choices and taking difficult decisions."

He said these choices were even more relevant to South Asia, "where the burden of history is disproportionately heavy and fuels a never-ending cycle of distrust and antagonism".

In this search for an alternate future it is reasonable to expect that India would shoulder a responsibility proportionate to its size. The prime minister said in today's context, when globalization and interdependence and integration were the dominant ideas, it was imperative for all states to draw strength from the support and cooperation of their neighbours.

Without naming India but not masking his intent either, he said: "This is more so for a large state aspiring to play great power role. Great power status is not solely a function of the physical indices of power, nor can it be gained through certain multi-lateral mechanisms.

"You would appreciate the significance of the gesture we made in offering India an energy corridor. It is our strong conviction that this would create mutual linkages and interdependencies, which can form the basis of closer overall relations between countries in the region," he said.

Mr Aziz described as a dangerous fallacy that Kashmir's struggle for freedom was an extension of any kind of terrorism, and said nothing could detract from the fact that the Kashmiris were denied the fundamental right to self-determination.

"We all know what the facts are. We also know that irrespective of the legal hair splitting and bureaucratic posturing, India's liberal conscience deep down knows that it has a case to answer on Kashmir. A full articulation of this realization would be the crossing of the Rubicon on the road to peace."

Lasting peace, he said, was a prerequisite to economic prosperity. "Unfortunately we are still caught in the vicious cycle of mutual tensions, military confrontations and high defence budgets. This cycle is no longer sustainable or practical. It must be broken."

On the issue of bilateral trade, the prime minister said it was important to acknowledge that India had a huge advantage in terms of balance of trade. Therefore, there was a need to identify reasons that made it difficult for Pakistan to get market access in India.

"We hope the economic experts committee would be able to deal with these issues effectively." Recalling the recent visit to Islamabad by Indian Foreign Minister Natwar Singh, Mr Aziz said the two governments took 'a historic' decision to allow travel across the Line of Control by bus between Srinagar and Muzaffarabad, a long-standing demand of Kashmiris.

Ahmed Hassan adds from Islamabad: The prime minister stressed the need to engage Kashmiri people in the ongoing composite dialogue to achieve a lasting peace in the region. "The people of Kashmir have been denied their fundamental right of self-determination which is their inherent right as human beings."

He said South Asia had the potential to become one of the major economic centres in the world but the sad reality was that any mention of South Asia for outside world evoked images of teeming multitudes swamped in poverty and deprivation.

He urged intellectuals and civil society groups in both countries to take a lead in endeavouring to define the contours of the vision for the future. "What we need is a fresh way of looking at old issues and finding innovative ways to move the process of civilizational evolution forward," he added.

The prime minister put two main themes as perspective on peace and development in their region, first establishment of a lasting peace through the dialogue process aimed at the settlement of all outstanding disputes and the second cooperation for economic development both on a bilateral basis and within the framework of Saarc.

To improve Indo-Pakistan relations, he said, both sides might have different perspectives on certain issues but the ultimate goal had to be the same to ensure a better, more prosperous and more secure future for the people of two countries.

Leaders and statesmen, intellectuals and media people and activists in both countries must not avoid the responsibility of demonstrating the necessary political will to eliminate the root causes of suspicions and misperception, he said.

Both have to put aside the tarnished legacy of mistrust, bitterness and tension and weave the commitment to peace into bilateral relationships, the prime minister added.

He said the Jammu and Kashmir dispute was one such seemingly intractable problem which Pakistan believed was the core issue between the two countries and that it could be resolved amicably and fairly.

He said to achieve this objective all parties to the dispute - Pakistan, India, and the people of Jammu and Kashmir - must demonstrate the will to address the issue sincerely with the objective of seeking an honourable solution based on mutual respect and accommodation.

He said all sides must acknowledge that the Kashmir issue was not at all about territories or ideologies but a human problem as the Kashmiris had been denied their fundamental right of self-determination.

So far as Pakistan was concerned, he said, any serious attempt to resolve the Kashmir dispute did not hinge on apportioning blame or demanding concessions that were either unreasonable or unjust.

The Pakistani leadership in its recent meetings with Indian leaders, he said, had emphasized the need to move away from conditioned reflexes and explore fresh ways to seek just and durable solutions to all outstanding issues, including the issue of Kashmir.

Turning to economic cooperation, the prime minister said under Saarc both countries were coming together in trade in Safta and MFN plus. He said the proposed gas pipeline projects linking India through Pakistan to the enormous gas reserves of West and Central Asia would be a huge economic CBM.