In a reversal to his known stand of seeking help from big powers to resolve the Kashmir issue, President Pervez Musharraf has said both India and Pakistan have come to a stage where a solution to the issue could be found on bilateral basis.

"We have come to a stage where a solution to the Kashmir dispute is possible on a bilateral basis and that is what we need to pursue and that is what we have been pursuing," Musharraf said while addressing a meeting on 'Peace and Security in South and West Asia' in Islamabad on Monday night.

Conspicuously absent from his lecture were his oft repeated references of the past about the need for involvement of US and other powers to resolve the issue.

Though battling a huge crisis sparked off by the suspension of supreme court chief justice Iftikar M Chaudhry, Musharraf devoted considerable time to elaborate his vision of Kashmir solution and bilateral efforts to resolve it through the current India-Pak peace process.

He said the two countries can 'reach a solution with in the basic parameters of demilitarisation, self governance and joint management' proposed by him.

"But unless we have sincerity, flexibility and courage, the three qualities required, we can not make headway," he said.

Musharraf said he saw Prime Minister Manmohan Singh as sincere person who 'sincerely believed' in peace and his reading was that people of both the countries also desired peaceful resolution and hoped that with sincerity, courage and flexibility headway can be made.

He said both the people and leadership of the two countries have now realised that confrontation is no more an option and Pakistan and India should move for political resolution.

A solution to Kashmir issue is 'important' to the region as the region has been seen as nuclear flash point, he said while describing Palestine as a "core dispute" that should be resolved to douse flames engulfing Muslim world.

While answering questions, Musharraf however disagreed with the suggestion of following India-China model of focussing more on trade to normalise ties despite their border dispute.

The issues that guided India-Pak relations were dissimilar and existed in different environment he said, terming the movement in Kashmir as 'freedom struggle' whose resolution was vital for the bilateral relations.

"We cannot put it aside," he said, stressing that Kashmir needs to be resolved first.

But Musharraf appeared to be in agreement with External Affairs Minister Pranab Mukherjee's comments at South Asian Free Media Association summit in Shimla few days ago that no time-frame can be set to resolve Kashmir issue.

"It was not possible to give a time-frame as to when the issue will be resolved," he said.

Musharraf said he saw 'positivity' in both the countries and their leaderships.

"Sincerity appears to be there...willingness appears to be there. We hope that we can resolve the dispute as it is at the core to improvement of our relations," he said.

"If anyone of the two conflicting parties are not prepared to step back no resolution can be sought� stepping back means courage, by giving up part of ego� If both sides are willing to do that solution is possible," he said.

Prime Minister Shaukat Aziz who also addressed the meeting organised by Altaf Guhar Foundation later said Pakistan allowed trade with India in certain areas and the volume has gone up substantially.

He said there were discussions about increasing flights, cooperation in banking system.