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KASHMIR,Sunday (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 here.

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." 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 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." Vajpayee said his Kashmir pointman N.N. Vohra would arrive in Srinagar soon to talk to the elected representatives and other sections of the society.

"We are prepared for talks with everyone. Our doors are not closed for anyone," he said to a query on whether separatists would be invited for talks.

Meanwhile Pakistani Foreign Minister Khurshid Mahmud Kasuri welcomed "wholeheartedly" the Indian offer of peace talks and said the three wars between the neighbours showed dialogue was the only way to peace.

"We welcome wholeheartedly" Indian Prime Minister Atal Behari Vajpayee's offer for negotiation to resolve disputes between the two countries, said Kasuri, speaking to AFP by telephone from Saudi Arabia where he was on a visit.

"We always believed that there is no other way to solve the problems than a composite dialogue for a sensible, just and fair solution to disputes" between the two countries, he said.

Kasuri said Islamabad welcomed any step that would help to normalize relations between the two countries. "Three wars have shown that they cannot resolve anything," he said.

Kasuri said Pakistan had kept its cool despite "a string of very aggressive positions issued recently."

He was apparently referring to recent statements by Indian Foreign Minister Yashwant Sinha and Defence Minister George Fernandes threatening Iraq-like preemptive military action against Pakistan.

"The international community is impressed by the maturity of Pakistan," Kasuri said.

Meanwhile multi-party alliance fighting Indian rule in disputed Kashmir called for Kashmiris' participation in talks between India and Pakistan to resolve the more than 50-year-old dispute over the Himalayan state.

Pakistan-based chairman of 18-party United Jihad Council Syed Salahuddin gave a guarded welcome to Indian Prime Minister Atal Behari Vajpayee's offer for talks with Pakistan on the Kashmir issue.

"The talks should be meaningful and tripartite," said Salahuddin, who also heads Kashmir's largest indigenous fighter outfit Hizbul Mujahedin.

He said that "practically it appears that the offer for talks is an attempt to score diplomatic points."

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