Islamabad: Asserting that the current peace initiative with Pakistan was his "last attempt", Prime Minister Atal Bihari Vajpayee has said terrorism was the biggest obstacle in the way of solving Kashmir and other issues between India and Pakistan.

"This is my last attempt," Vajpayee, who will arrive in Islamabad tomorrow (Jan 03, 2004) to participate in the SAARC (South Association for Regional Cooperation) summit told Pakistan daily 'Dawn' in an wide ranging interview, indicating that age was not in his side to continue with such efforts in future.

Sounding conciliatory with hints to make some important confidence building measures to supplement the ones made by the two countries in the past few months, Vajpayee sounded categorical in asserting that only terrorism remained a hurdle for resolving the vexed issues between the two countries.

"If we could put down violence, terrorism and hostility behind us, I can see no obstacle to establishment of a climate of friendship and cordiality in which we can discuss and resolve all our outstanding bilateral issues, including Jammu and Kashmir," he said.

Stating that there was vast consensus in India for peace initiatives with Pakistan, Vajpayee said the widespread impression in India was to see whether the Indian peace initiatives were getting matching response from Pakistan.

"The main question that is raised by critics of my peace initiatives is whether it is getting and will get in future a matching and sustained response from Pakistan," Vajpayee said.

Pointing out that several factors contributed to craving for friendship between the two countries, the Prime Minister said, "First and foremost, popular sentiments are overwhelmingly positive. Second, the imperative of globalisation dictates closer cooperation for faster economic development.

"Third, in the post-cold war world, it is our national interest to join hands in taking the many common problems we face in our countries with the outside world. And finally, for how long do we want the world to look at India-Pakistan relations either as a threat to global peace or as a promising laboratory in new experiments in conflict resolution?" he asked.

Vajpayee, however, rejected Pakistan President Pervez Musharraf four point formula, enunciated by him at the 2001 Agra summit, which stipulated that the two countries accept Kashmir as a dispute, initiate talks, discard solutions not acceptable to each other and reach a solution closer to the positions of both the countries.

Reacting to Musharraf's formula, Vajpayee said the Shimla Accord provided both the countries to have a bilateral dialogue to settle the Kashmir issue.

"In spite of our clear position on the status of Jammu and Kashmir, India has never shied away from a dialogue on the subject," he said.