"We are committed to working with Pakistan to create an environment in which India and Pakistan can have the friendliest possible relations," he said in an annual media conference.

"I attach great importance to that object."

He said there had been movement in the two-year-old peace process between the South Asian neighbours.

While confidence building measures undertaken by the two countries have strengthened transport, cultural, sporting and commercial links since starting the peace process, they have made little headway on Kashmir, the cause of two of their three wars since independence from British rule in 1947.

"We have said we are committed to finding pragmatic, practical solutions to all outstanding issues between India and Pakistan including the issue of Jammu and Kashmir," Singh said, but added he did not have a mandate to negotiate the transfer of Indian territory.

Singh said he was ready to hold fresh talks with the main political separatist alliance, The All Parties Hurriyat Conference, to push for a peaceful resolution of a 15-year-old Muslim separatist revolt in Jammu and Kashmir, mainly Hindu India's only Muslim-majority state.

"Our doors are open to every shade of opinion." Singh said. He had held talks with Hurriyat leaders last September but the dialogue made little progress.

New Delhi had rejected proposals made by Pakistani President Pervez Musharraf last month to demilitarise three Indian Kashmir cities in an attempt to push talks over the disputed Himalayan region forward.

More than 45,000 people have died in the revolt in Indian Kashmir and New Delhi says Islamabad is not doing enough to crack down on Islamic insurgents filtering from the Pakistani sector into its part of the region through the military Line of Control.