To begin with traders should be allowed to go across freely from either side and the valley should be converted into a "free economic zone" where the two nations could carry out business activities as per the guidelines of SAFTA, he told reporters in New Delhi.

"Kashmir has always been seen as a bone of contention between India and Pakistan but now the same could be turned into a bridge between the two countries," the PDP patron said.

Sayeed said he had a talk with Pakistan's Foreign Minister Khursheed Mohammed Kasuri during the banquet hosted by Prime Minister Manmohan Singh for the SAARC leaders.

When his attention was drawn towards the fact that apples and handicrafts continued to be on the negative list of SAFTA, Sayeed pointed out that immediate measures needed to be taken for taking them out of the list as both the items were mainstay of valley's economy.

Jammu and Kashmir Chief Minister Ghulam Nabi Azad has already taken up the matter with Commerce and External Affairs Ministries to take out apples and handicrafts from the negative list of export category of SAFTA.

Sayeed also favoured holding of crafts bazar in the valley besides setting up of the SAARC university campus in the state.

When asked about the committees formed by the Centre to go into the issues raised by him, Sayeed said his party was highly appreciative of the steps taken by the Prime Minister in addressing to the issues raised by his party.

He, however, parried an answer to a question whether formation of committees was dilution of his stand as he had earlier said that committees would be only "window dressing" and that he was not interested in it.

To a question whether the coalition government was going to continue in the state, Sayeed said, "It is going on" but the coalition government is always a "battle of nerves".

The former chief minister defended his demand for troop reduction from the state saying that army was no answer to the present situation in the state and it could be well resolved within the ambit of political dialogue.

Asked about the "self-rule" formula as advocated by his party and how was it different from National Conference's autonomy proposal, Sayeed said, "Autonomy is part of self-rule under which the mandate of the people has to be respected.

"This means that Article 356 of Indian Constitution will not be applicable to the state of Jammu and Kashmir," he said.