ISLAMABAD, Jan 6: President Pervez Musharraf said on Tuesday his agreement with Indian Prime Minister Atal Behari Vajpayee to start a "composite dialogue" next February was a historic leap forward that must move on to settle festering disputes between their two countries.

"History has been made," the president declared at a news conference he addressed shortly after the path-breaking agreement was announced in a Joint Statement.

He said it was a new beginning of a process aimed at settling all bilateral issues between the two nuclear rivals, including the dispute over Jammu and Kashmir.

But he said that in making the latest peace move, which has ended a deadlock of about two and a half years since the collapse of his summit with Mr Vajpayee at Agra in July 2001, the two sides had reached "where we never reached in the past".

"After Agra I was a disappointed man, today I am a happy man," he remarked, speaking about two hours after the Indian and Pakistani foreign ministers addressed separate news conferences to release the accord reached as a result of talks between the Pakistani president and the Indian prime minister on Monday on the sidelines of the Saarc summit that ended on Tuesday.

"The string that was broken at Agra has been repaired in Islamabad," he said as he helped an Indian journalist complete an extempore Urdu couplet: "Agra mein jo tar tootay they, wo Islamabad mein jurh gaey".

MAIN POINTS: The president stressed what he called three main points of the agreement: (1) Kashmir is an issue which has to be resolved, (2) the two sides have to have a "composite dialogue" to settle all issues, and (3) there are linkages between three areas of interest to both sides: sustenance and forward movement of CBMs, initiation and progress of the composite dialogue, and Pakistan's resolve to fight terrorism and not allow its territory to be used for such acts. "There is a simultaneity in all these three elements," he said. The Joint Statement containing the agreement quoted President Musharraf and Prime Minister Vajpayee as calling for a consolidation of the CBMs taken by the two sides, which include withdrawal of troops massed on the border after the attack on the Indian parliament, resumption of full diplomatic ties and restoration of air, road and rail links.

It quoted Mr Vajpayee as saying that "in order to take forward and sustain the dialogue process, violence, hostility and terrorism must be prevented". In turn, President Musharraf "reassured Prime Minister Vajpayee that he will not permit any territory under Pakistan's control to be used to support terrorism in any manner," the statement said.

"President Musharraf emphasized that a sustained and productive dialogue addressing all issues would lead to positive results." "To carry the process of normalization forward... (the two leaders) agreed to commence the process of composite dialogue in February 2004," it said.

"The two leaders are confident that the resumption of the composite dialogue will lead to peaceful settlement of all bilateral issues, including Jammu and Kashmir, to the satisfaction of both sides."

The president, who faced a volley of questions from mostly Pakistani and Indian journalists who had assembled in Islamabad for the three-day Saarc summit emphasized that no deal had been done behind the scene.

He said the two sides had agreed to resume the broken dialogue because of a realization of the necessity for peace rather than any outside pressure and stressed that Kashmiri people would be taken along in reaching a settlement about their future.

The president said the agreement had been made possible by his more than an hour's meeting with Mr Vajpayee on Monday and was "sealed" by a phone call he received from the Indian prime minister on Tuesday morning.

Asked about what else they talked during the telephone call, he said he wished the Indian prime minister well and "he prayed for my protection" (from dangers).

VICTORY OF MODERATES: General Musharraf commended what he called flexibility shown by both sides and described the accord as a victory of all peace-loving people of India and Pakistan as well as people of Kashmir who, he said, had suffered for long.

"It's a victory of moderates in India and moderates in Pakistan," he said. "It's a beginning, but a good beginning.... We will move forward with hard work and trust in each other."

The president said the two sides had not yet decided at what level the talks would be resumed in February and he also side-stepped a question whether they would pick up the thread from where they had left at Agra, where an accord was reportedly aborted by differences over the choice of words to describe the Kashmir dispute.

"No I don't think so...," he said and added that he did not want to be involved in "contentious issues" of whether the dialogue be picked up from Agra or Shimla. "We didn't reach an agreement (at Agra)."

"Let the dialogue process start," he said, adding that the level of talks would be decided in due course. "We will like to take the process to its culmination."

ENGAGING KASHMIRIS: Asked whether he had consulted Kashmiri leaders on both sides of the Line of Control (LoC) about the points agreed in the Joint Statement, he said he had been meeting Kashmiri leaders in the past and "we will take them along".

"There is no nefarious design in it (agreement) at all," he said. "Who can deny that...we must involve Kashmiris (at one stage or the other). Once we start moving forward, there is no doubt they will be involved.

He said he intended to meet Kashmiri leaders to explain to them "nuances" of Tuesday's agreement.

"I don't believe in hiding things in my pocket," he said in reply to a question, adding: "There is no secret deal or a (secret) deal in the offing....There is no behind-the-scene activity going on."

Answering a question, the president, who survived two attempts on his life last month, said he expected a fallout from extremists opposed to the peace move but promised to deal with them sternly.

"We must negotiate strongly and deal with extremists strongly," the president said. Asked if Pakistan would launch another crackdown against extremist elements, President Musharraf referred to the ban already imposed on several religious and militant groups and promised "we will adopt more measures to curb religious extremism".

He said Pakistan had ordered a ceasefire on LoC with the "blow of whistle" but the same could not be done to stop insurgency in the Indian-occupied Kashmir.

"I can never guarantee anything there," he said, but added that "one could facilitate" things and that there might be a response from Kashmiris to the progress of dialogue between India and Pakistan.

Replying to questions, the president favoured cultural visits by Indian singers to Pakistan and the lifting of a ban on the telecast of Indian television channels but said he had not discussed such matters with Mr Vajpayee.

He also side-stepped a question whether Pakistan would grant the most-favoured-nation status to India in bilateral trade and said everything was dependent on the progress of the planned dialogue. The president rejected a suggestion that Tuesday's agreement could have been reached with "facilitation" from outside.

He said recent happenings in the world, particularly those after 9/11 had created a realization in both India and Pakistan that "the move forward is in peace".

"I think it is because of the thaw (created) in the past few months, and the Saarc conference afforded an opportunity (to clinch the deal)," he said and added that the leaders of the two countries were "the main movers" of the process.

"The deal is between India and Pakistan.... There is no suggestion of any outside force having forced our hand into it." "There were no magic wand or magic words that I used to convince your leadership," he told an Indian journalist.

Asked by Indian journalist when he would visit India, the president said: "You invite me and I will come there."

NINE LIVES: "I have nine lives," the president said when asked about dangers to his person after two abortive assassination attempts against him last month within a gap of 11 days. "We have to take to task every extremist," he said. "No extremism will be allowed in Pakistan."

He told a questioner that there were "extremists on both sides" who might not want peace and "may like to sabotage" the deal. "We have to move strongly for peace."

NUCLEAR RESTRAINT: The president agreed with an Indian journalist that the two countries give up their nuclear arsenals that the questioner said were like stones that could destroy each other's "glass houses".

He said the nuclear weapons could be destroyed if both countries agreed to make South Asia a nuclear-free zone. But he said he was confident the two countries would not use these weapons "because stones are in the hands of both of them and they know that their glasses will be broken."