Kashmir lies at the "heart of Indo-Pak confrontation", Pakistan President Pervez Musharraf said on Saturday.

"Let us be pragmatic. Let us learn to accept harsh facts. Kashmir… has to be settled in an equitable and honourable way acceptable to India, Pakistan and Kashmiris," he said addressing the India Today Conclave 2004 in New Delhi via satellite from Islamabad.

"We must persevere... If there is no movement towards a solution, I am afraid everything will slide back to square one," Musharraf said referring to the improvement in Indo-Pak ties.

Musharraf said no leader in Pakistan could sideline the Kashmir issue.

"India and Pakistan must bury the past and chart a new roadmap for peace. People of both countries desire for peace and are fed up with confrontation."

The Pakistani leader said Kashmir was the "source of disunity in South Asia" and because of this the South Asian Association for Regional Cooperation was on the "periphery of impotence".

He said if the "upheaval" in Afghanistan and Kashmir was resolved, "we can strike at the root of extremism and terrorism".

Musharraf said Pakistan was going after Al-Qaeda elements in its tribal areas and had the "will and the capability" to eradicate foreign terrorists from its territory.