CALGARY (Canada), June 28: Group of Eight leaders on Thursday called for an end to India-Pakistan tensions over Kashmir and said the two countries should hold dialogue to ease tension.

Leaders of the world’s richest nations meeting in the Rocky Mountain retreat of Kananaskis disagreed over the fate of Palestinian leader Yasser Arafat but agreed to a new multi-billion dollar aid package for African development.

Russia was offered 20 billion dollars over ten years to destroy its arsenal of nuclear, biological and chemical weapons.

A statement by Canadian Prime Minister and G8 summit chairman Jean Chretien insisted that Pakistan must “put a permanent stop to terrorist activity originating from its territory under its control.”

Islamabad and New Delhi “should commit to sustained dialogue on the underlying issues that divide them,” Chretien urged.

Although no reference was made to India in the official statements, European diplomats said G8 leaders had made it clear that Delhi needed to understand the “regional reality” of Kashmir.

US President George W. Bush’s controversial call for the ouster of Palestinian leader Yasser Arafat met with strong opposition from Europe and Russia.

“We have a simple position: It is for the Palestinians to designate their representatives,” said French President Jacques Chirac.

Palestinians could not be asked to vote in elections planned for next January and then told who to elect, the French leader warned.

Italian Prime Minister Silvio Berlusconi, however, said it was time Arafat quit.

“If I were Arafat I would retire...he would be honoured as a man who did all he could for his people,” the Italian leader said. In contrast to the US stance, Europeans also underlined the need to hold an international conference to end Israeli-Palestinian bloodshed.

The centre piece of the two-day meeting was a G8 pledge to provide Africa with up to 6 billion dollars in aid by 2006 in return for economic and political change across the continent.

The “G8 Africa Action Plan” launched in Kananaskis would help give Africa’s ailing economies a new start, said Canada’s Chretien.

But rich nations said their help was conditional on respect for democracy and human rights.

“We will not work with governments which disregard the interests and dignity of their people,” G8 leaders warned.