Asking United States and the world community to encourage all sides to resolve the Kashmir issue, Pakistan President Pervez Musharraf [Images] on Saturday night said a conducive environment and improved Indo-Pak relations offered a unique opportunity in finding an acceptable solution.

"We are engaged in a dialogue process with India to resolve all disputes, specially Kashmir," Musharraf said in his speech at a banquet hosted in honour of visiting US President George W Bush [Images].

"The conducive international environment and improved relations between Pakistan and India offer a unique opportunity to find a settlement acceptable to all sides, especially the Kashmiri people... The world community, specially the United States, can help by encouraging all sides to move forward towards that goal," he said.

He also asked Bush to help to effectively discourage "sinister acts of blasphemy" like the Danish cartoons of Prophet Muhammad causing violent protests from Muslims.

In his address, Bush praised Musharraf's leadership specially his commitment to fight against terrorism and termed the US and Pakistan as allies in terror as well as restoring peace in South Asia and asked him to take further steps to restore democracy.

"President Musharraf, you proved to be man of courage and vision. I appreciate the honour of being a partner to working for peace and security," he said.

"Our nations are allies in the war against terror and allies in laying lasting peace in South Asia. Pakistan's efforts to enhance peace and security have won the respect and admiration of the American people," he said.

"When terrorism is defeated and when peace is won, our two nations share peace together," he said, adding that the American people were interested to see further steps to establish democracy and expand educational opportunities for boys and girls in Pakistan.

Also See: The Bush Visit