Prime Minister Atal Bihari Vajpayee on Sunday night admitted that his peace initiative had suffered a setback owing to Pakistani President Pervez Musharraf's statements in New York.

"Despite the setback, a fresh impetus needs to be given to ensure that all outstanding issues between the two countries are resolved peacefully and through dialogue," he said on arriving in New Delhi after a 13-day tour during which he visited Turkey and addressed the United Nations General Assembly in NY.

Lal Kishenchand Advani, deputy prime minister, and Murli Manohar Joshi, who resigned as human resource development minister following the Rae Bareli court verdict in the Babri Masjid demolition case, were there to receive the PM.

On the issue of Iraq, he said developments in the war-ravaged country were high on his agenda of discussions with world leaders in NY.

The PM said he had clearly stated India's position on Iraq during his engagements at the UN.

"The role of UN in Iraq is not clear and the world body needs to have a greater say," he said.

He also said there was a need for reforming the UN.

He described his visit to Turkey as "successful" and said New Delhi and Ankara shared democratic and secular principles.

"All efforts will be made to give a boost to trade between the two countries," he said.