SRINAGAR, India (AFP) - India is ready for talks with Pakistan on the future of Kashmir but Islamabad first has to take "concrete steps" to end Islamic militancy in the region, India's prime minister said.

Speaking at a press conference wrapping up his two-day tour of the disputed region, Prime Minister Atal Behari Vajpayee repeated a peace offering he made on Friday to India's arch-rival, but said he now awaited a response from Islamabad.

"It is possible to make a new beginning, but it depends on Pakistan," Vajpayee said.

"We will see what concrete steps Pakistan takes. I have extended the hand of friendship and want to see how Pakistan replies to it.

"Cross-border terrorism should end. Talks can open on all subjects, including Jammu and Kashmir. I hope that across the border, we will get a proper response and we will be able to move ahead."

He added: "As along as cross border terrorism is going on and militants are preparing to cross the border ... fruitful talks cannot happen."

India accuses Pakistan of fomenting an uprising in its sector of the disputed Himalayan region and of sponsoring attacks by Islamic activists across the de facto border.

Pakistan insists it only provides moral and diplomatic support to activists it regards as freedom fighters engaged in a struggle for self-determination.

Some 38,000 people have been killed since the rebellion was launched 14 years ago. Separatists put the toll twice as high.

When he arrived in the state on Friday, Vajpayee adopted a surprisingly conciliatory tone towards Pakistan, offering a hand of friendship and urging peace talks on Kashmir in an address to a public rally in Srinagar.

Responding to that speech, Pakistan Prime Minister Zafarullah Jamali Friday welcomed Vajpayee's offer, but said Islamabad would not compromise on its stand on the disputed territory.

Pakistan wants a UN-sponsored plebiscite in Kashmir to allow Kashmiris to exercise their right of self-determination.

During Saturday's press conference, Vajpayee said conditions internationally had been changed after the US-led war in Iraq .
"Whatever has happened in Iraq is a warning for all of us ... Whatever has happened in Iraq is a warning for the whole world, particularly for developing countries."

Kashmir, he added, was at a crossroads.

"There is need for a new beginning ... We want to travel down the road of friendship. What Pakistan wants to do, only time will tell."

The prime minister said it was important that the arch-rivals, who have fought two of their three wars over Kashmir, hold talks, "because it can bring solutions."

"To leave the path of talks and take to some other step is not desirable. It is important that talks should be held and problems resolved and that we look at the development of both nations."

Asked if separatists and other Kashmiri groups would be invited to the talks, the prime minister said no one would be excluded.

"We are prepared for talks with everyone. Our doors are not closed for anyone."

PHOTO CAPTION

Indian Prime Minister Atal Behari Vajpayee (R) and Jammu and Kashmir Chief Minister Mufti Mohammed Sayeed (L) wave to the crowd during a public rally in Srinagar.(AFP/Prakash Singh)