Speaking after talks with European Union (EU) officials in Brussels, he also hailed recent progress towards stabilizing Afghanistan, fueled by presidential elections last October.

"Pakistan strives for peace with India," he told reporters in a joint press conference with EU foreign policy chief Javier Solana.

"We are taking a step at a time in the right direction. We are optimstic that the composite dialogue process will take peace in south Asia to new levels," he added, referring to peace talks between Islamabad and New Delhi.

The slow-moving peace process has been shaken recently by Pakistani accusations that India is violating a 14-month-old ceasefire in Kashmir, days after New Delhi alleged Islamabad had launched mortar bombs into its territory.

Aziz discussed the latest India situation with Solana, notably underlining a number of initiatives such as the opening of an energy corridor and a cross-border bus services as examples of bolstered cooperation.

A diplomat close to the talks said the two men had no substantial discussions of the recent tensions.

The Pakistani leader meanwhile welcomed signs of progress in Afghanistan, which is battling to recover from decades of civil war notably with parliamentary elections in a few months' time.

He trumpeted the fact that trade between Pakistan and Afghanistan has ballooned to 1 billion dollars last year.

"Pakistan believes in peace in the region and a strong, stable economically vibrant Afghanistan is good for the people of Afghanistan, for Pakistan and for the region as a whole," he said.

Solana meanwhile said that the EU is happy with the democratization process under Pakistani President Pervez Musharraf.

Musharraf, who seized power in a bloodless coup in 1999, has infuriated extremist groups by his ties with Washington and faces pressure from opposition parties over his broken promise to relinquish his role as army chief.

Solana said that issue had been discussed. "We have got very good guarantees, which for us is enough, that the process is going to continue, that democracy is there to stay," the EU chief said.

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