Pakistan's relations with India will improve under his government, Prime Minister Yousuf Raza Giliani said on Saturday but insisted that an early settlement of all disputes, including the Kashmir issue, was necessary for the two countries to benefit from the 'peace dividend.'

Gilani expressed the confidence that "with the election of the new government, Pakistan's relations with India will improve, allowing both countries to grow, develop and prosper in an atmosphere of peace and amity". He said Pakistan is committed to the peace process with India and wants to improve and strengthen relations with it.

"Peace hinges on an early and just settlement of all outstanding disputes, including the Kashmir issue, in keeping with the aspirations of the Kashmiri people," Gilani told Shahid Malik, Pakistan's High Commissioner to India. Malik, who was in Islamabad to participate in the recent talks between India and Pakistan, to review the composite dialogue process, called on Gilani at the Prime Minister's House this afternoon.

"Both countries need to move from the phase of dispute management to dispute resolution so that our region can also benefit from the peace dividend," Gilani said. Following talks between visiting External Affairs Minister Pranab Mukherjee and his Pakistani counterpart Shah Mahmood Qureshi, the two countries signed an agreement on consular access to prisoners and said they had narrowed their differences on outstanding issues.

Malik briefed the Prime Minister on the status of the composite dialogue with India in the context of the overall relations between the two countries.