Srinagar (PTI): Reaching out to Pakistan, Prime Minister Manmohan Singh on Friday said India was keen to normalise relations with Islamabad and advocated "new ways" of working together to address all outstanding issues including the Kashmir imbroglio in a friendly manner.

"We want to normalise relations with Pakistan," Singh, who is on a two-day visit, said at a crowded press conference.

The Prime Minister also made it clear that Government was open to holding dialogue with all shades of opinion in the state including separatist groups.

"They are welcome to come. I am not closing my doors," he said.

"We must create conditions whereby a Kashmiri living in Srinagar or Muzzafarabad (Pakistan Occupied Kashmir) should not see any problem" about people-to-people contacts, Singh said.

Describing as "irrelevant" old ways of thinking, the Prime Minister said "new ways" of working together were required to strengthen bilateral ties between the two countries.

"A strong, stable and prosperous Pakistan is India's interest", he said.

"Good relations with Pakistan is an essential part of our policy. My vision of India-Pakistan is that both countries situate their bilateral relations in a cooperative framework of mutual understanding.

"We seek the normalisation of relationship with Pakistan, a solution of all issues that cause estrangement including Jammu and Kashmir through dialogue and peaceful negotiations in an atmosphere free of violence," Singh said and added "while we cannot change borders, we can make them irrelevant."

Responding to a volley of questions, Singh said it was too early for withdrawal of Armed Forces (Special) Powers Act. "It is too early, frankly, to consider this. If the situation begins to normalise, we have to review it. The situation today is not that sort. I can't assure you," he said.

The Prime Minister, who is on a first visit to the state after the recent Amarnath land row, said though it was always a pleasure to come to Kashmir, "there is a tinge of sadness this time because of the recent incidents of violence in the state which have caused concern to all of us."

He said the incidents in the state showed that there was some resentment towards the government among the section of youths here on certain issues. "It is always been our belief that most of the difficult issues can be resolved through dialogue," the Prime Minister said.

The Prime Minister said the government will welcome dialogue with all sections of people including those who have so far opted to stay out of the political process.

"I urge that who ever has complaints and grievances should come forward for dialogue. At an appropriate stage, I would also be happy to meet them," he said.

On the assembly polls in the state, Singh said that in a democracy elections were only means to test the popularity of any particular group or individual.

Appealing to all sections of the state to participate in the elections, the Prime Minister said the government was committed to ensure free and fair polls in the state.

Concerned that terrorism in the country has become a "sad reality", he said "profiling" of a particular community or "labelling" them as terrorists must be avoided while fighting this menace.

"Terrorism has no religion. Terrorists will have to be dealt with as terrorists and not that as belonging to a particular community," he said.

The Prime Minister said in the process of tackling terrorism "we must avoid profiling communities or labelling them as terrorists."

"Acts of terrorism in various parts of our country are a sad reality with which we will have to grapple. It is posing a serious threat and people will have to work towards tackling this menace," the Prime Minister said.