"We appreciate and support Pakistan's fight against terrorism," Ms Halonen told newsmen in a joint press conference with President Musharraf, who arrived here on a three-day official visit to the Scandinavian country.
The Finnish President, who held talks with President Musharraf in her summer residence here about 180km south-west of the capital Helsinki, called for collective international efforts against the menace of terrorism.
"We need to strengthen international co-operation, international networking and create international links to control the menace," Ms Halonen emphasised.
President Musharraf, in his remarks, underlined the vital significance of addressing the root causes of terrorism, saying, poverty, lack of knowledge and non-resolution of political disputes lead to despair and extremism.
"The roots of terrorism must be addressed, in this respect the Western countries should help Muslim countries achieve socio-economic development and also play their due role in finding lasting resolution of longstanding political disputes."
During the one-hour talks, the two leaders discussed bilateral relations, regional situation and international issues of common concern.
President Musharraf explained efforts being made to improve the state of human rights in the country and the devolution of power at the grassroots.
Prior to the talks, President Musharraf was accorded formal welcome at a ceremony. Later, the Finnish leader hosted a dinner in honour of the President.
President Musharraf said that his government is determined to eliminate terrorists and remnants of al-Qaeda from Pakistan.
The two leaders discussed political, defence and economic matters during the talks.
In reply to a question, President Musharraf said he will take a decision about his uniform at an appropriate time and in national interests.
"I have to take a decision according to national dictates, too much is happening in the world and in our region and domestically.
"There is still time to take a decision - the decision will totally be in the Pakistan's national interests - we do not want to derail the reforms undertaken for the development of the country."
Musharraf said the European Union is the biggest trading partner of Pakistan, stating that the country looks forward to enhancing its trade ties with Finland.
"Our bilateral trade, presently at $ 54 million, is not reflective of the large potential that exists bilaterally, we should increase our economic ties through joint ventures."
President Musharraf was assisted in the talks by Minister for Industries Liaquat Ali Jatoi, Senator Dr Shahzad Wasim, MNAs Malik Amin Aslam and Hina Rabbani Khar, Foreign Secretary Riaz Khokhar and Information Secretary Syed Anwar Mahmood.
The Finnish leader said her country can extend co-operation to Pakistan in social sectors including education and health.
Finland, she said, will encourage the Pakistani leader to go further for devolution of power.
On Wednesday, President Musharraf will lead Pakistan in talks with the Finnish side to be led by Prime Minister Matti Vanhanen.