India and Pakistan need to move from "conflict management" to "conflict resolution" through more confidence building measures, settlement of outstanding disputes and promotion of economic cooperation, Pakistani President Pervez Musharraf [Images] said on Wednesday.

Reaffirming Pakistan's resolve to "peacefully address all outstanding issues with India", Musharraf told visiting Indian External Affairs Minister Pranab Mukherjee that there is a "need for an early and durable settlement" of the Kashmir dispute in "accordance with the wishes of the Kashmiri people".

Mukherjee, who was in Islamabad to meet his Pakistani counterpart Shah Mehmood Qureshi to review the composite dialogue process, called on Musharraf at the Aiwan-e-Sadr or presidency in Islamabad on Wednesday morning.

Mukherjee was accompanied by Foreign Secretary Shivshankar Menon.

Noting the "positive contribution" of the composite dialogue process to the improvement of bilateral relations, Musharraf said both countries have agreed on a number of confidence-building measures and there is "a need to sustain and consolidate this process".

Emphasising the need for an early and durable settlement of the Kashmir issue, Musharraf 'stressed the need for associating the Kashmiri people in the dialogue process,' said an official statement.

While also calling for addressing the Siachen and Sir Creek issues, Musharraf said there was "a need to move from conflict management to conflict resolution through more confidence-building measures, settlement of outstanding disputes, economic and commercial cooperation and people-to-people contacts".