President Pervez Musharraf said on Tuesday that India and Pakistan have made 'reasonable progress' on resolving the Kashmir issue and hoped that 'ultimate peace' will be achieved in the region.

He made the progress of the Indo-Pak peace process a major theme of his inaugural address to the two-day meeting of Foreign Ministers of the 57-member Organisation of Islamic Conference to drive home his point that the Israel-Palestine issue should be resolved in a similar manner.

"Pakistan and India, I think, have come to a stage where we have realised that a military solution is no longer the answer. Therefore, we are moving towards peace.

"In today's environment people of both countries desire peace. Therefore, it is upto the leadership and governments to reach peace. We are moving successfully on a dual track of confidence building measures and conflict resolution," he said.

Musharraf said Indo-Pak relations 'have never been as good as they are today. We need to consolidate with conflict resolution and in conflict resolution we are trying to resolve the Kashmir dispute over which we fought three wars and many other skirmishes. We are making reasonable progress'.

He said the resolution of the Palestine dispute is not possible if both parties are not prepared to step back and swallow some ego.

"The courage needed to compromise and reconcile is far greater than the courage we need to fight and to confront. Compromise and reconciliation are only possible if both the parties are ready to give up their egos and prepare to fall back. We hope that this will be the pace between India and Pakistan so that we can achieve ultimate peace in the region," he said.