Pakistan has suggested to India that both countries should pull back troops from the Line of Control to demilitarise the region and hand it over to police.

"Our suggestion is that both countries should pull back their troops and security could still be maintained in the area through police and other organisations," Prime Minister Shaukat Aziz said in an interview to ARY TV telecast on Tuesday.

He also said that the atmosphere between the two neighbours was improving but progress on disputes resolution was not up to what it should have been.

While opening of five crossing points on the LoC, which was aimed at fostering contacts and interaction among Kashmiris was a positive development, these points were not functioning as effectively as they could have, Aziz said.

• Bilateralism: Pakistan's sleight of hand 

He referred to his as well as well as President Pervez Musharraf's [Images] meeting with Prime Minister Manmohan Singh [Images] last year and said various ideas were being discussed through back channel diplomacy, which included proposals like self- governance and demilitarisation.

Pakistan has been reiterating self-governance and demilitarisation as its ideas to ease tensions along the LoC, especially in the aftermath of the October 8 earthquake but declined to elaborate and put forward them as proposals.

Indian officials continue to maintain that while Aziz mentioned these two 'ideas' in his talks with Dr Singh in Dhaka during the SAARC summit in November last year, Pakistan has not given a detailed proposal on it.

Aziz said Pakistan had presented the suggestions with an open mind, adding that both Pakistan and India would have to exhibit magnanimity, flexibility and courage.

• 'Independent Kashmir a mental luxury'

"It is our desire to improve our ties with India so that there may be peace in South Asia which will lead to development and prosperity," he said.

Aziz added that Pakistan wanted the 'core issue' of Kashmir to be resolved in accordance with the aspirations of the people of Kashmir in order to establish lasting peace. Pakistan desires headway on all issues, including Kashmir, he said.