Pakistan President Pervez Musharraf [Images] on Tuesday said that while Islamabad does not want to enter into an arms race it would maintain its defensive deterrence levels.

Without naming India, Musharraf said, "We do not want to enter into an arms race but we will do whatever is necessary to preserve the credibility of its minimum defensive deterrence levels." Addressing the United Nations General Assembly, he said that Pakistan desired a peaceful environment in the region and has been engaged in a peace process with India aimed at confidence-building and resolving issues, including on Jammu and Kashmir [Images] that has been the source of conflict between the two countries.

He said his meeting with Indian Prime Minister Manmohan Singh [Images] on the sidelines of the Non-Aligned Movement Summit in Cuba was a constructive one that could further the peace process between the two countries.

"I am confident that my positive meeting with Prime Minister Singh will help to carry forward the peace process, which is vital for the future of both countries and for peace in South Asia," Musharraf said. "Improved relations and the conducive international environment have brought an acceptable solution to this long-standing dispute within reach," said Musharraf.

Noting that the stable security environment is also important for peace in the region, he said that Pakistan has opposed the creation of a strategic restraint regime in South Asia encompassing a minimum nuclear deterrent and a balance of conventional forces. Musharraf said Pakistan, however, has a legitimate requirement for nuclear power to meet the energy needs of its expanding economy.

"As a responsible nuclear state, we will continue to seek nuclear technology for power generation under International Atomic Energy Association," he said. "We cannot accept discrimination in the nuclear field," he said.

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Claiming that Pakistan is in the forefront of the fight against terrorism, Musharraf said problems along the bordering regions of Pakistan and Afghanistan are compounded by the continuing presence of three million Afghan refugees, some of them sympathetic to Taliban. "The incentives offered to the refugees for their voluntary return by the international community are minimal," he said and called for a "serious international commitment" to facilitate their repatriation.

"Unless we end foreign occupation and suppression of Muslim peoples, terrorism and extremism will continue to find recruits among alienated Muslims in various parts of the world," Musharraf said.

He impliedly criticised the US policies in the Muslim world, which, he said, cause anger among the Muslim world and spawn terrorism. Across the Muslim world, he said, old conflicts and new campaigns of military intervention have spawned a deep sense of desperation and injustice. "Each new battleground involving an Islamic state has served as a new breeding ground for extremists and terrorists. Indiscriminate bombings, civilian casualties, torture, human rights abuses, racial slurs and discrimination only add to the challenge of defeating terrorism," he said.

Peace and stability in Afghanistan, Musharraf said, is in Pakistan's vital interest, for it would assure tranquility on the western frontiers and enable the country to realise its ambition of linking Central Asia and South Asia through Afghanistan and Pakistan.

Stating that one of Pakistan's "strategic" aims is to utilise is "unique geo-strategic" position to build trade, energy and communication corridors linking South Asia, West Asia, Central Asia and China, he said that regional integration would accelerate economic growth and prosperity. Despite "daunting challenges" Pakistan is facing from within and without, he said it is "boldly" trying to build an environment of peace and stability in the region.

Musharraf, who returned to the theme of terrorism several times, said the greatest challenge to global security, campaign against terrorism and credibility of the United Nations is the "cauldron" of conflict that is the Middle East.

"This was exemplified by the latest Israeli aggression against Lebanon. We hope that the resolution painstakingly brokered in the Security Council will lead to rapid and complete Israeli withdrawal and restoration of Lebanon's sovereignty over its entire territory," he added.

The attack on Lebanon has far reaching implications for the Middle East, he said, adding that the ability and relevance of the moderate forces to bring about a just peace in the region has been put to a severe test. "The world must, however, still support them to address the festering problems of the region, comprehensively and fairly, he said, calling for ending Israel's conflicts with all its neighbours and resolving the Palestine problem.

"There is no doubt in our mind that this is the core of the challenge, not only to overcome the Iraq and Afghanistan problems, but also to deal with the menace of terrorism and extremism," he told the assembly. The confrontation over Iran's nuclear programme, he said, threatens further instability in this already inflamed region. Pakistan, Musharraf said, believes that this issue can be resolved peacefully in a manner that accommodates the "legitimate interests" of all the parties.