Prime Minister Shaukat Aziz will propose a series of confidence-building joint projects with Indian Prime Minister Manmohan Singh at a regional summit in Bangladesh next weekend, the Financial Times reported on Monday. He hoped the projects would pave the way to progress in ending difficulties such as the dispute over Kashmir. A gas pipeline to connect India with Iran via Pakistan and a move to open banking links were among possible measures which "would improve the atmospherics", Prime Minister Shaukat Aziz told the FT in an interview.

The paper quoted Aziz as adding there were "many other possibilities which we want to explore".

The South Asian nuclear-armed neighbours have made progress in patching up relations since going to the brink of a fourth war in 2002, but the issue of the disputed Kashmir region remains.

Top diplomats from the countries met in December to discuss the dispute, which lies at the heart of the rivalry between the countries, but made little headway.

Copyright Reuters, 2005