Pakistan on Friday said it was ready to work closely with India to 'expose the hidden hands' behind the Mumbai terror attacks [Images] as it did not want terrorists to derail the peace process between the two countries.

"I have assured Prime Minister Manmohan Singh [Images] of our complete cooperation in investigating these attacks. We are prepared to engage India closely to expose the hidden hands behind these attacks," Prime Minister Yousuf Raza Gilani [Images] said.

"While the terrorists may try to derail the peace process between Pakistan and India, we should not allow them to succeed in their nefarious designs," Gilani said in his address at a dinner for heads of missions of European Union states.

Pakistan, he noted, had condemned the terrorist attacks in Mumbai 'in the strongest words'.

Gilani said Pakistan and the EU have a common stake in the war against extremism and terrorism.

"Internally, we have evolved a well thought out multi-pronged strategy to restore peace in (the tribal areas) and parts of the NWFP. Our policy has a greater chance of success because it has both political and public ownership," he said.

Noting that this policy is succeeding, Gilani said the local population in several tribal areas had 'risen against the terrorists'.

"An improvement of the situation in the tribal areas will have a salutary impact on the security situation of the country as a whole," the prime minister said.

However, he said that the 'sustainable resilience' of the terrorists is 'directly correlated to the availability to them of drug money from Afghanistan'. This source of terrorist financing must be checked, he said.

Pakistan is fully committed to the peace, stability and reconstruction of Afghanistan, and bilateral relations and mutual confidence had improved in the past six months, Gilani said.

He also said Pakistan had 'paid a huge human, social and economic cost in the fight against terrorism'. Around 5,000 acts of terrorism were committed in the past three years, resulting in the death of thousands of people, he said.

Budgetary allocations for the anti-terror drive and security measures have a negative impact on development activities and Pakistan's participation in the anti-terrorist campaign has led to massive unemployment and displacement of people, Gilani said.