DHAKA: The process of confidence building between Pakistan and India began last year and they were now exploring ways for "conflict resolution" instead of "conflict management," Pakistan Prime Minister Shaukat Aziz said on Sunday.

Speaking at a breakfast meeting with editors and senior journalists here, he said his bilateral talks with Prime Minister Manmohan Singh on the sidelines of the SAARC summit on Saturday were "very fruitful." Demilitarisation

The talks largely focussed on demilitarisation on the frontiers of the two countries and self-governance of Kashmiris.

"A trust deficit still remains in the ties between the two countries ... [but] the matrix of [the] Pakistan-India relationship is such that any dialogue or talks can resolve the bilateral conflicts."

Mr. Aziz termed the confidence building process "a step-by-step block building exercise."

"Stakeholders"

"For the sustenance of the peace process in the region, we must talk about Jammu and Kashmir, and any settlement can be possible only through the consensus of three stakeholders — India, Pakistan and the people of Kashmir," he said.

He said bilateral conflicts were "stumbling blocks" to progress in the South Asian grouping in the past two decades despite its "tremendous potential" but added that the SAARC was expected to become dynamic in its third decade with the summit leaders agreeing on several reform issues.

Mr. Aziz underlined the need for replicating the best practices in the region for common benefit, citing an example of Pakistan copying Bangladesh's micro credit model. He suggested that India lead the region in the IT sector and the Maldives promote tourism in member countries.

He also stressed the need for strengthening the SAARC Secretariat. He said that a consensus on formulating a social charter and attainment of observer status in the United Nations were major successes of the forum in the past two decades. Expanding SAARC

He reiterated the Pakistan stand on expanding SAARC with the inclusion of Afghanistan as its eighth member and giving China the status of "dialogue partner" or "observer."

Responding to a question on outstanding bilateral issues with Bangladesh, including that of "stranded Pakistanis," Mr. Aziz termed it a "very complicated" and "humanitarian" issue. There had been talks with Bangladesh authorities on taking them to Pakistan.

On Dr. Singh's proposal for intra-region transit facilities to third countries on a reciprocal basis, he hinted that land transit could be launched with the resolution of other outstanding issues.

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