Taking note of "major and significant developments" in the Indo-Pak ties, US President George W Bush has said the Kashmir issue is "ripe" for resolution.

The "Kashmir issue is ripe for solution", Bush was quoted as saying by Pakistani officials during a meeting he had on Sunday with Premier Yousuf Raza Gilani on the sidelines of the World Economic Forum for the Middle East in Egypt.

Bush's remarks came ahead of a meeting between External Affairs Minister Pranab Mukherjee and his Pakistani counterpart Shah Mehmood Qureshi in Islamabad on May 21, 2008 to review the Composite Dialogue process.

During the hour-long talks in the resort of Sharm-el-Sheikh, Bush said he saw "major and significant
developments" in Pakistan-India relations, but he did not elaborate. He said he was happy to note that the two sides had made a lot of progress in their talks on Kashmir and for comprehensive peace in the region.

Briefing reporters after the Bush-Gilani talks, the Pakistan Prime Minister's Special Assistant on Finance Hina Rabbani Khar and Additional Foreign Secretary Zameer Akram said that Bush had appreciated the dialogue process between India and Pakistan and said he had no doubts in his mind that Kashmir was "ripe for solution".

Khar said Pakistan's relations with neighbouring countries figured in the discussions between the two leaders, with specific focus on ties with India. Khar quoted Bush as saying that it was the "right time for the resolution of the Kashmir issue". Besides Pakistan-India relations and bilateral matters, Bush and Gilani discussed the situation in Afghanistan with special reference to the war on terrorism and extremism.

Bush assured Gilani that the US would offer another economic package to Pakistan to help fight poverty, which was rising due to an unprecedented increase in food prices.

Bush was of the view that the second economic package would hopefully be offered by his successor after the forthcoming US elections, Khar said. Khar also said that Bush was aware of Pakistan's increasing difficulties in meeting Afghanistan's wheat and flour requirements.

"Pakistan is paying a price in war against terror and needs to be supported adequately," Bush was quoted as saying by Khar.

Additional Foreign Secretary Akram said Bush and Gilani exchanged views on strategic relations, covering all aspects, including economic and defence matters. Bush assured Gilani that the strategic approach would take forward the process of building a comprehensive relationship between the two countries.

Pakistan was also assured of greater market access to help improve its economy, Akram said.

Khar said that the US had offered the first economic package to Pakistan in Camp David and a similar package covering health, education and women's development would be provided. Bush was concerned about rising food inflation in developing countries, including Pakistan, and pledged all possible support, she added.

Secretary of State Condoleezza Rice particularly assured Pakistan that the US would help it to fight poverty among women.

Khar said the issue of reinstating judges sacked by President Pervez Musharraf during last year's emergency was not discussed at the meeting because the US considered it an internal matter of Pakistan.

Gilani told Bush that Pakistan was committed to fighting terrorism and extremism and would continue to cooperate with the international community in an effort to eradicate the menace that was causing problems the world over.

Bush said, "I fully understand that Pakistan is dealing with serious issues and deserves all support from US and the western countries."

A missile strike in Pakistan's Bajaur tribal region by a drone operated by US forces in Afghanistan also figured in the discussions, Gilani said.

Pakistan has protested against the attack, saying military action against militants within its territory could only be taken by Pakistani forces. Gilani also informed Bush that there had been a change in the system and for the first time in Pakistan's history he was unanimously elected prime minister by Parliament.

His government, he said, would work with the US administration to further improve bilateral relations.