Islamabad:  Visiting political leader from Indian Kashmir Mehbooba Mufti held talks on Friday with Pakistan People's Party leader Asif Ali Zardari, a key personality in the new ruling coalition.

They discussed the Pakistan-India peace process launched more than four years ago, with particular reference to the dispute over Kashmir, sources said.

Mehbooba Mufti called for making the de facto border between the two parts of Kashmir "irrelevant" to commerce, trade and interaction among people on both sides.

She said the government of President Pervez Musharraf had pursued a "good policy" on the Kashmir issue aimed at resolving the issue through dialogue and hoped that the Pakistan People's Party (PPP)-led ruling coalition would carry the process forward.

Zardari said the new government firmly believed in settlement of all issues through dialogue.

He said the coalition government intended to resolve the dispute, he said, adding that the parliament would debate it in order to evolve an action-oriented approach.

The PPP leader said the confidence building measures taken in the past would be examined in order to determine what more could be done.

"We intend to solve the issue; democracies do not fight wars and they work for peace. We want peace on all borders," he said.

In January 2004 Musharraf and then Indian premier Atal Bihari Vajpayee initiated the peace dialogue that led to allround improvement in bilateral relations.

A ceasefire was enforced on the Line of Control, the de facto border between the two zones of Kashmir, ahead of the peace dialogue agreement has been made.

A cross-border bus service was also introduced, but talks as well as back channel diplomacy did not produce a breakthrough towards a resolution of the Kashmir dispute.