Stepping up the rhetoric on Kashmir ahead of a meeting between Prime Minister Manmohan Singh and President Pervez Musharraf, Pakistan has linked the proposed Iran-India gas pipeline with progress on the Kashmir issue through "meaningful talks."

"We are ready to allow transit facilities and also foolproof security (to gas pipeline) but India will have to deal with Kashmir issue in an equitable and peaceful manner through meaningful talks so that progress can be made on other areas including gas pipelines," Prime Minister Shaukat Aziz said in an interview published in Pakistan Observer on Monday.

His comments came close on the heels of Mushrarraf's assertion that Pakistan would never give up Kashmir.

Musharraf is meeting Singh in New York later this month.

"I will meet Manmohan Singh (on September 22) and tell him in unequivocal terms about our stand on the issue. We will not give up Kashmir," he told a meeting of army officers and soldiers at a Garrison Darbar'in Quetta on Saturday.

Claiming that the ball was now in the Indian court, Aziz said, "Kashmir is the core issue and nothing can move without making any progress on Kashmir. In fact India needs resolution of disputes more than us."

Pakistan showed interest in the gas pipeline projects as it was hoping to get around US $600 million in royalties.

The gas pipeline projects, especially the Iran-India gas line, figured prominently during the recent talks between External Affairs Minister K Natwar Singh and his Pakistan counterpart Khurshid M Kasuri.

A joint statement issued after their talks in New Delhi said that a separate meeting of Energy Ministers of both countries would discuss 'availability and accessibility of energy resources' in the region.

Aziz said gas pipelines from Turkmenistan, Iran and Qatar have to go through Pakistan into India.

"Fact remains that India for its economic sustainability, direly needs these gas pipelines," he said.

Aziz said that his 'government is mindful of the stark reality that people of the subcontinent are hostage to Kashmir issue'.

"South Asia needs economic and social growth. We need to eliminate poverty, disease and evil of extremism from this region. And this cannot happen unless the two nuclear neighbours resolve Kashmir dispute," he said.

He also ruled out rolling back of Pakistan's nuclear programme saying that that presence of a credible deterrence is a guarantee to a peaceful coexistence with India.

"Credible defence will ensure Pakistan's sovereignty and integrity," Aziz said.

Defending the increase in defence budget this year, Aziz said that Pakistan's nuclear and defence programme was a guarantee to peace in this region.

"It was Pakistan's credible deterrence that kept India at bay two years ago when she amassed two millions troops on Pakistani borders," he said, adding anything could have happened at the time had Pakistan not equipped with a credible deterrence.

On the domestic front Aziz said under Musharraf the country had come back from bankruptcy to emerge as a developing nation.

Aziz said he is not daunted by criticism of forming an 'over-sized' Cabinet containing 33 ministers.

"It will be for the first time in Pakistan's history that ministers will have objectives and goals which they will have to accomplish in given time," he said.