"The points have been agreed, and we are very happy on these five points of interaction" on the LoC which would help the Kashmiris living on either side to cross over and help each other, he told a press conference here.
Secondly, the President said he believed that there was an opportunity for the two countries to utilise and move towards a solution of the decades-old dispute.
"I think, there is an opportunity, which we should utilize for a solution, for moving ahead towards a solution. I think that is a great opportunity," he added.
The President said the two countries should think of demilitarising the whole Kashmir region.
"Let's give comfort to those people. Therefore, a lot can be done if we sit down and talk, a lot of steps can be taken," he added.
Responding to a question, the President said the recent bomb attacks in New Delhi would not have any impact on the ongoing peace process between Pakistan and India. "There should not be any impact (of the terrorist attacks) on the peace process."
He condemned the weekend bombings in New Delhi as "dastardly act of terrorism," and offered Pakistan's support to Indian officials in carrying out investigation into the incident.
"We condole the loss of lives with the Indian government and the bereaved families," he added.
President Musharraf ruled out any cut in Defence budget in the wake of earthquake, saying that it was a security requirement and a separate issue. "The Defence share in total budget is just around 17 percent," he added
"I don't want to do one thing and jeopardise the other," the President said adding that the government would meet the challenge of reconstruction and rehabilitation.
The President appreciated the international countries' response to the rescue and relief efforts but stressed that more support was needed for the second phase of reconstruction and rehabilitation "which is a very big task, and requires billions of dollars".
Musharraf said he would inform the meeting of the donors' community convened in Islamabad on November 19 about the extent of financial requirements for the reconstruction phase.
He said the process of assessing the quake-wrought damage was underway and would be completed by November 15.
The President said he would not support the idea of inviting world leaders for the conference, saying that it would deviate focus from the main issue--reconstruction and rehabilitation.
The President appealed to industrialists, businessmen and expatriate Pakistanis to wholeheartedly contribute to President's Relief Fund.
He said sponsorship for any structure like school, college, hospitals etc would be dedicated to the sponsor's name.
The President brushed aside the impression that civilians were not engaged in the relief and reconstruction processes.
He said that the Federal Relief Commissioner and the Earthquake Reconstruction and Rehabilitation Authority (ERRA) were working under the Prime Minister.
He said that Establishment Division and a lot of civilians were working with the Relief Commissioner. Similarly, the Planning Commission was assisting the Erra.
The President said both Erra Chairman Lieutenant General Zubair and Major General Farooq Ahmed Khan are eminently qualified to head the relief and reconstruction efforts.
He said that Prime Minister Shaukat Aziz and CDA chief were looking into the building construction codes.
He, however, noted that buildings in Islamabad, except for one, had withstood the tremor of 7.6 magnitude.
The President rejected the impression that the government and the army had reacted belatedly after the quake hit.
Despite broken roads and disrupted communication, the army reacted swiftly to reach out to the affected people in the quake-hit areas, he added.
The President said that roughly 100,000 army personnel, including three divisions, were involved in the rescue and relief efforts.
Of helping the displaced persons, the President said details of damage were being prepared with the help of data available with Nadra.
He said a committee was also working, and expressed the confidence that all people would get assistance in a transparent manner.
President Musharraf, when asked why Pakistan did not accept Indian helicopters with their pilots, said that there was sensitivity involved there.
He said both sides were maintaining their defences along the LOC and both would not allow helicopters from opposite sides flying over them.
President Musharraf dismissed the impression that the government was doing any re-thinking on the construction of mega projects in the wake of the devastating quake.
"Pakistan has to move on, and not stop," he said, and added that the country would meet the challenge posed by the calamity.
To a question, President Musharraf said there was a threat to people living on mountains, who are facing problems of shelter from plummeting temperature.
He hoped that those living in higher reaches would understand the compulsion and come down to the valleys where they could be helped more easily.
However, the President added that army teams were helping these people to re-erect their houses.
Replying to a question, the President said he would like to meet opposition leaders to discuss the relief and reconstruction efforts. He said he was ready to invite them himself.
He said that at the moment destitute women and orphaned children were being retained at the rehabilitation centres, after they are released from hospitals. These rehabilitation centres would be relocated to their own areas in later stages.
Children identified by parent were handed over to them while the government would undertake the responsibility of education and upbringing of unclaimed children, he added.
President Musharraf appreciated the NGOs and helping the destitute women and orphans and said that volunteers had also offered financial adoption of these children.
The government was making efforts and also talking to various countries for making available artificial limbs to help those rendered disabled by the quake, he added.