Thursday, January 26 2006 16:27 Hrs (IST) - World Time -

London: Pakistan will not bow to pressure from the US to call off its planned pipeline deal with Iran, President Pervez Musharraf has said, stressing it was central to his country's economic strategy.

"Our industrial growth, foreign direct investment, depends on availability of energy. We are proceeding with thpipeline. It is in our economic interest," he was quoted as saying in an interview to the Financial Times newspaper.

Musharraf said no country had the right to tell it not to proceed with the project.

However, he indicated that the US could pay Pakistan not to go ahead with the deal.

"If somebody wants to stop us they should compensate us.But at the moment we are going ahead," he said.

The US has said it was opposed to the Iran-Pakistan-India gas pipeline project due to concerns over Tehran's nuclear programme.

On the Indo-Pak peace process, Musharraf claimed New Delhi had made no effort to respond to repeated proposals from Pakistan on how to advance the dispute over Kashmir.

The Pakistani president condemned the recent US air strike in northern Pakistan which killed 18 people, including civilians as well as suspected al-Qaeda terrorists.

"It has been very clearly told to the US we do not want anybody to take such actions within the borders of Pakistan," Mursharraf said.

Denying suggestions that Pakistan was politically unstable, he said it was winning the struggle against jihadi terrorism.

"There were al-Qaeda and Taliban in the cities. We acted against them, we got about 700 of them. There are no al-Qaeda in the cities any more," he said.