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UNITED NATIONS,Friday (AFP) Indian Prime Minister Atal Behari Vajpayee labelled Pakistan a terrorist blackmailer in a speech to the UN General Assembly that also backed mounting calls for Security Council reform.

Reacting to Pakistan President Pervez Musharraf's offer to "encourage" a general cessation of violence within Kashmir, Vajpayee said the proposal was tantamount to a "public admission" that Pakistan was sponsoring terrorism in the divided Himalayan territory.

"We totally refuse to let terrorism become a tool of blackmail," Vajpayee said. "Just as the world did not negotiate with al-Qaeda or the Taliban, we shall not negotiate with terrorism," he added.

In Islamabad, Pakistan accused Vajpayee of distorting Musharraf's remarks made to the UN assembly on Wednesday.

"Prime Minister Vajpayee has distorted President Musharraf's statement. By rejecting the president's constructive proposal for dialogue and diplomacy, India has spurned peace," foreign office spokesman Masood Khan told AFP.

India accuses Pakistan of arming, training and funding rebels in Indian Kashmir. Pakistan contends it provides only moral and diplomatic support to an "indigenous" uprising and charges that India is guilty of rampant human rights abuses.

In his speech Wednesday, Musharraf proposed a ceasefire along the Line of Control dividing Indian- and Pakistan-controlled Kashmir, and said Pakistan would be willing to help reduce violence in Kashmir in return for "reciprocal obligations and restraints on Indian forces."

Vajpayee, however, stuck to the Indian line that New Delhi would only enter into negotiations with Pakistan after a complete cessation of "cross-border terrorism." He questioned the credibility of Pakistan's membership of the US-led global coalition against terror, arguing that it smacked of "double standards" that could only contribute to multiplying terrorism.

The prime minister also rejected Musharraf's charge that India was forcing Pakistan to engage in a South Asian arms race by building up its conventional and non-conventional military hardware.

"I would like to point out to the president of Pakistan that he should not confuse the legitimate aspiration for equality of nations with outmoded concepts of military parity," Vajpayee said.

The Indian leader also launched a scathing attack on the "complacency and negativism" of the UN Security Council and called for a radical overhaul of its membership.

Vajpayee said the weaknesees inherent in the make-up of the Security Council had been brutally exposed by the "extraordinary inability" of the five permanent members to agree on action in Iraq.

A democracy of more than one billion people, India has long pushed for a permanent Security Council seat, arguing that the current holders - Britain, China, France, Russia and the United States - are unrepresentative of changes in the world order and leave no voice for the developing world.

"The permanent members guard their exclusivity," Vajpayee said. "This combination of complacency and negativism has to be countered with a strong political will." He also criticised the council's decision-making mechanisms, particularly the permanent members' veto power.

"A single veto is an anachronism in today's world," he said.

India was critical of the US-led war in Iraq which did not have UN authorisation, but Vajpayee said it was "no longer very productive" to linger on the past and called for a coordinated effort, spearheaded by the UN, to ensure Iraq's security and stability.

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