"We have initiated a process of rapprochement with India and we look forward to a peaceful coexistence with India in the region, through confidence-building measures and through the resolution of all disputes," Musharraf said.

"May I say, I see a light at the end of the tunnel, now ... the process of rapprochement has started," the general said.

Musharraf spoke during an official visit here -- the first such trip by a Pakistani leader to Latin America -- as he lunched with Brazilian President Luiz Inacio Lula da Silva.

As the Pakistani and Brazilian foreign ministers inked a series of accords to fight drug trafficking and combat hunger, Musharraf said that a push by both Pakistan and India will be needed to underwrite the peace process.

Pakistan and India have fought two of their three wars over the disputed territory of Kashmir, but in April last year then-Indian prime minister Atal Behari Vajpayee started the current peace process by offering a "hand of friendship" to Pakistan.

However, Musharraf went on to say -- as he departed the lunch with Lula -- that the peace bid "needs two hands to clap."

"So my hand is there, I hope the other hand will also be there and then we will be able to reach peace. But peace by resolving all disputes, which includes the dispute of Kashmir."

Earlier Monday, the two nuclear rivals agreed new dates for a meeting between their top foreign ministry officials to review progress on the peace process, according to an Islamabad-based foreign ministry official.

However, that news came as Pakistan test-fired a short-range nuclear-capable missile Monday, its fifth missile test this year, despite the ongoing peace talks with rival India.

It was the third test of the "Ghaznavi" or Hatf-III surface-to-surface missile with a range of 290 kilometers (180 miles), the military announced in a statement.

Most of this year's tests have been seen as bids to ease domestic fears that Pakistan may be pressured to dismantle its atomic program, after it emerged key nuclear scientist Abdul Qadeer Khan had been involved in proliferation.

Islamabad and New Delhi have been engaged in a peace dialogue since January, with officials and politicians discussing various major sticking points. The first round of the talks was completed in September.

Musharraf said Pakistan, a "moderate Islamic country," is fighting a small "extremist" minority which "is trying, through militancy, to dominate the majority."

"By the grace of God we are succeeding and will remain steadfast" in putting down violence, said Musharraf -- who has ruled Pakistan since leading a coup five years ago.

He spoke as Pakistan and Brazil's foreign ministers, Khurshid Kasuri and Celso Amorim respectively, signed cooperation accords between the countries.

One accord seeks to crush drug trafficking through an exchange of police information and intelligence on shipping routes and methods. Another agreement signed Monday would remove the need of diplomats to obtain visas before visiting one anothers' countries.

Brazil also wants Pakistan's backing for a permanent seat on the UN Security Council.

Musharraf, who will travel to the United States after visiting Argentina and Mexico, said he will congratulate US President George W. Bush on his re-election earlier this month, "and of course I will utilize the opportunity to discuss important world issues."

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