Sydney: Maintaining his usual rhetoric that violence in the Kashmir valley is not terrorism, President Pervez Musharraf has said the Kashmir issue should be resolved politically between India and Pakistan.

"In Kashmir, there is a freedom struggle going on and the people of Pakistan are emotionally involved with it. This is a 50-year-old dispute and we better resolve it politically...We don't think any terrorism is going on there," he said in an interview to Australian public television SBS last night (Apr 7, 2004).

"Now if anybody is carrying out terrorism around the world, we certainly are against it and we would like to act against it... Jaish-e-Muhammad is the one, which is an extreme organisation and the leader is underground. We will get hold of him at any time, we are trying to look for him," he said without naming him.

Jaish-e-Muhammad was floated by Masood Azhar soon after his release by India to end the 1999 hijacking episode of an Indian airlines plane to Kandahar.

When asked there seems to be a Pakistani link to every major terrorist organisation on earth like al-Qaeda, Taliban and Lashkar-e-Toiba, the President said, "This is the most serious issue confronting us. We have to remove the misperception from our Western border that everything in Afghanistan is happening from our territory. So we need to operate against al-Qaeda."

"The other issue is there is a perception that Pakistan is an extremist, intolerant, militant society, which is again wrong. This Government and I have banned the extremist organisations, we have banned Jaish-e-Muhammad, we have banned Lashkar-e-Jhangvi, we have banned Sipah-e-Sahaba, we have banned a Shi'ite party, we have banned about six extreme organisations. We've sealed their offices, we've frozen their accounts," Musharraf said.

He also complained that his Government was receiving "very minimal" assistance, as it tried to flush out al-Qaeda and Taliban fugitives from the areas bordering Afghanistan.

"Money needs to be spent in our tribal areas, where these al-Qaeda... or Taliban Government agents are, (where) we are operating against them," he said. "Now all this needs money and we are getting some assistance, which is very minimal... we are spending our own money, so there is a requirement of spending money in this tribal area to bring them into mainstream of life."

However, Musharraf made it clear that he didn't want more troops, but only resources.

Asked if Iraq had been a distraction and the money and resources could have been better spent in Afghanistan and if needed within Pakistan, the President said, "Yes, indeed."

When told that there was a list of people beginning with Osama bin Laden and Mullah Omar suspected of being in Pakistani tribal area, he said, "You don't act on suspicions, you have to have definite intelligence, not information, intelligence - confirmed through either technological means, or seen through the air. Now this was lacking in the past. Pakistan does not have the capability. This is all borrowed capability - technological and aerial."