Aziz made the remarks during his hour-long meeting with visiting Indian Minister for External Affairs Pranab Mukherjee, who called on him at the PM's House.

Aziz said that human capital was the best asset of South Asia which coupled with skills and appropriate technology could change the destiny of its people.

Pakistan was keen to peacefully settle all its disputes with India including the issue of Jammu and Kashmir so that both countries could develop, progress and prosper in an atmosphere of peace and amity, Aziz said.

He said that Pakistan was of the view that sustainable and abiding peace in South Asia could be achieved after the settlement of the Kashmir dispute which must be in keeping with the wishes and aspirations of Kashmiri people and be acceptable to Pakistan and India.

Pakistan was committed to the ongoing process of composite dialogue which needed to be made more meaningful and result oriented. Pakistan also stands committed to the Confidence Building Measures (CBMs) which have improve the atmospherics between the two countries, he added.

He said that the ambiance had never been more propitious and all sides needed to demonstrate courage, commitment, magnanimity and flexibility to find solutions to outstanding disputes.

Aziz said that Pakistan was committed to the objectives of the South Asian Association for Regional Cooperation (SAARC), which provides an excellent platform to promote economic cooperation in South Asia.

"Our vision will remain unfulfilled unless the organization is energized and made effective to exploit the full potential of its member states," he said.

Aziz said that Pakistan expected India to address its trade regime with Pakistan with a view to providing a level-playing field by removing hurdles in the shape of non tariff barriers.

He said that it was encouraging that the rust deficit between the two countries was reducing and they were moving in the right direction.

Aziz said that Pakistan was fighting terrorism out of conviction, in its own national interest and for maintaining peace in the region and across the world. The root caused of terrorism especially the feeling of deprivation and the lack of dispute resolution need to be addressed to eradicate this scourge.

Mukherjee said that India was keen to resolve all issues with Pakistan to establish good neighborly relations with it in order to leverage the full potential of the region.

He said that he agreed with Aziz that the peace process between the two countries should not be allowed to become hostage to the single incidents of terrorism.

Mukherjee said that he was happy to visit Pakistan, adding that India was encouraged by the improvements in the atmosphere between the two countries and both countries should pursue the path of sustainable peace.

He handed over a letter to Aziz from Indian Prime Minister Manmohan Singh inviting him to attend the SAARC summit to be held in New Delhi on April 3-4, 2007.