Shortly after Pakistan President Pervez Musharraf [Images] remarked that the earthquake offered a lifetime opportunity to settle the Kashmir issue, India Saturday said it was willing to resolve all bilateral issues through dialogue in an "atmosphere free from terrorism".

• Quake hits North India

Speaking after Musharraf at the International Donors Conference to raise funds for the October 8 earthquake victims, Minister of State for External Affairs E Ahamed said that India was ready to undertake specific projects of reconstruction in the affected areas of Pakistan.

"I thank you for the kind references to my country. It is very much encouraging to see that people of both countries have come forward to help the victims of this tragedy and have contributed wholeheartedly for relief," he said addressing Musharraf.

"The spontaneous outpouring of sympathy and goodwill for the victims of the quake gives us the strength and motivation to work for greater people-to-people contacts and confidence building measures between our two countries," Ahamed said.

Responding to Musharraf's remarks that the earthquke offered an "opportunity of lifetime" to the two countries to resolve Kashmir issue, the minister said, "On Jammu and Kashmir [Images], our position is well known. India is prepared to resolve all issues, including Jammu and Kashmir through dialogue between our two countries in an atmosphere free of terrorism and violence". 

Ahamed said he was specially sent to Islamabad by the Indian government to offer full support to the government and people of Pakistan in rehabilitation and reconstruction efforts for quake victims.

"I once again reaffirm our full cooperation and support to these efforts that are being mobilised for the earthquake," he said.

He affirmed India's pledge of $25 million made at October's donor's conference held by the United Nations at Geneva.

"The government of Pakistan would be welcome to use these funds for sourcing supplies from India. It is our wish that India's contribution should be used for rebuilding of schools and hospitals and rebuilding houses of affected people. The technology available in India for pre-fabricated earthquake centres can also be sourced from this funds," he said.

Welcoming Musharraf's comments that Pakistan could get Indian steel for construction, Ahamed said, "We have noted your suggestion to source construction materials from India. I would like to convey the willingness of government of India to take up specific projects in education and health where India has wide experience and expertise."

Besides India could be the "ideal partner" to undertake the projects as it shared "cultural and administrative and technological compatibility" with needs of Pakistan in these areas.

"We look forward to identify such projects in consultations with the government of Pakistan," he said.