Amid fresh peace overtures by India and Pakistan, President Pervez Musharraf has said his country could work for a no-war pact with India followed by mutual reduction of troops and de-nuclearisation of South Asia if the Kashmir issue was resolved.

In an interview to a Pakistani TV channel ARY Gold, Musharraf said the Pakistani army could cut its size if the Kashmir issue was resolved.

"Our concern is our security. We have been saying that if there is no problem to our security, Pakistan and India can move to mutual reduction of forces and have no-war pact," he said.

Musharraf dismissed reports that India and Pakistan agreed to a dialogue process due to pressure from the international community.

"No one can put pressure from outside but there can be some suggestion for this purpose."

Musharraf said the new peace move was initiated due to the prevailing impression in India and Pakistan that issues could be resolved through a dialogue.

"Pakistanis and Indians realise talks should be restarted and all the disputes should be resolved in the mutual interest of the two countries and the region."

"I think it will be a great achievement for the leaders of the two countries," Musharraf said.

Musharraf declined to directly answer questions whether BJP hardliners scuttled a settlement in Agra.

He dismissed the opposition's demand to quit as army chief.

"I will not leave my uniform because if I take such a decision at this moment it will be detrimental to Pakistan's interest. I am providing the harmony among the institutions (in Pakistan)," he said during the interview.

He clarified that by institutional harmony, he meant understanding between different power centres, including the legislature, military and judiciary.

He, however, conceded that one person should not hold the offices of president and chief of army at the same time.

The fresh assertions came a day ahead of the commencement of the fourth round of talks on Monday between Prime Minister Mir Zafarullah Khan Jamali's government and opposition parties on the status of the controversial constitutional amendments promulgated by the military ruler ahead of the last year's polls.