Lauding Prime Minister Manmohan Singh's [Images] recent interactions with Kashmiri groups, President Pervez Musharraf [Images] has said Pakistan had opted to resolve the Kashmir issue 'bilaterally' without taking recourse to multilateral track.

Complete Coverage: Indo-Pak Peace Talks

"I am very glad to say that Prime Minister Manmohan Singh has been interacting with all groups of Kashmiris. Obviously, he is talking of some kind of resolution, what else we are talking," he said in a programme in CNBC TV on Friday night.

He said he would discuss Kashmir and other issues with Dr Singh when the prime minister visited Pakistan.

Significantly, Musharraf stressed on a bilateral track to resolve Kashmir problem. "We are going on a bilateral track and Pakistan is going along with India. We do realise that we have to resolve this dispute bilaterally. I am not at all multi-lateralising it."

'India must consider Pak proposals'

"The world is conscious of the fact this needs to be resolved in a bilateral way between India and Pakistan... I do know that ultimately we have to resolve it bilaterally."

He also said that if the bilateral way did not work, Pakistan would go for multilateralism. "However, if we fail to do it bilaterally, I have no doubt that I would like to multi-lateralise it. At the moment we are going on bilateral track."

He said that Pakistan has also started interacting with pro-India Kashmiri parties like the National Conference, with whom Islamabad never spoke to in the past and referred to National Conference leader Omer Abdullah with whom he interacted during the latter's recent visit here.

Musharraf also said the demilitarisation of Kashmir, a proposal he had forwarded to India last year, could be a final solution to Kashmir problem. "I have proposed demilitarization as a ... final resolution. Demilitarise Kashmir, give self governance to people of Kashmir with a joint management arrangement on top. This is an idea I am proposing."

"We could debate and modify the idea but we have to come up with an idea of final settlement of the dispute to the acceptance of India, Pakistan and people of Kashmir. It is for people of Kashmir now to generate the kind of ideas and pressure on the Indian government on some form of a resolution," he said.

Musharraf also rejected the notion that Pakistan had sidelined Kashmir issue. "Pakistan will never sideline Kashmir -- its resolution is central to ultimate peace between Pakistan and India... I do talk about it everywhere because we think this is core dispute which we need to resolve to improve relations between our two countries and to improve South Asia and make SAARC potent and contribute inter-regional development."

"We have to resolve our disputes with India if at all we have to realise the trade linkages between Central Asia and India and China and India and Middle East and India... Therefore Kashmir is very much in the limelight," he said.

"We are going forward on CBMs and conflict resolution. In conflict resolution Kashmir is key issue and we have to move forward," he added.

Noting that India's trade with Central Asia and Afghanistan and vice versa was not possible without Pakistan, he said, "China is keen on having trade with India and shortest route is through Pakistan. This is a reality of Pakistan's geography and geo-strategic location."