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NEW DELHI, Thursday (AFP) India offered a raft of new measures aimed at improving relations with rival Pakistan and in a surprise development said its deputy prime minister would hold talks with Kashmir separatists.

The unprecedented gestures, unveiled by Foreign Minister Yashwant Sinha, included the resumption of full sporting ties, humanitarian assistance, increased transport links and easing of cross-border movement.

The move was welcomed by Islamabad, which said it would respond positively despite disappointment the offers did not extend to direct dialogue between the two countries over the Kashmir issue, the cause of two India-Pakistan wars.

Sinha said the offers, if accepted by Pakistan, could herald the strengthening of diplomatic ties, only recently reestablished after fresh tensions took the countries to the brink of conflict.

Links were severed two years ago after talks between the two nuclear rivals collapsed, a situation exacerbated by a December 2001 attack on India's parliament, blamed by New Delhi on Pakistan-backed Kashmir separatists.

But relations have been thawing since Indian Prime Minister Atal Behari Vajpayee offered a symbolic hand of friendship to Pakistan during a visit to disputed Kashmir in April.

"This is the normalisation process, which is to go back to a position where the relationship first becomes normal. In a broad sense go back to the position that was there before the attack on parliament on December 13," Sinha said.

He said the latest steps did not signal the resumption of talks between Vajpayee and Pakistani President Pervez Musharraf, insisting these would be linked to a cessation of cross-frontier violence in Kashmir.

"We cannot have sustained, meaningful and productive dialogue at the same time cross-border terrorism is going on. That is the position we continue to hold and continue to tell Pakistan," Sinha said.

Violence has surged since April in Indian Kashmir, overshadowing the nascent peace process. India accuses its neighbour of supporting rebels, but Pakistan says it offers only moral and diplomatic backing to freedom fighters.

However, in another bold move Wednesday, India's powerful security cabinet said Deputy Prime Minister Lal Krishna Advani would hold talks with the leader of the main Kashmiri separatist alliance, until now shunned by Delhi.

The announcement of the discussions between Advani and Maulana Abbas Ansari, chairman of the All Parties Hurryiat Conference, follows an offer by the fractious Hurriyat to engage in dialogue with the Indian government.

Although Pakistan said it would respond positively to the gestures, its foreign ministry spokesman Masood Khan said more dialogue was needed.

"Pakistan's response to any proposal that is substantive and unconditional and genuinely designed to improve relations will, as always, be positive.

"We are disappointed that while making these proposals, India has simultaneously reiterated its rejection of Pakistan's offer to resume substantive and sustained dialogue to resolve all issues, notably the ... Kashmir dispute." Meanwhile the United States welcomed India's proposals to normalize relations with its neighbour.

The moves "represent a major step toward establishing normal links between these two important neighbors and for providing a foundation for real progress in resolving differences between India and Pakistan," said Adam Ereli, a State Department spokesman.

"We warmly welcome these proposals," he said.

Earlier Britain welcomed a raft of new measures from New Delhi on Wednesday aimed at improving India's troubled relations with neighbour Pakistan.

"I warmly welcome the statement," British Foreign Secretary Jack Straw said in a press release after the unprecedented gesture by Indian Foreign Minister Yashwant Sinha. "Such steps will help to build greater confidence and trust between India and Pakistan," Straw said.

"I very much hope that both governments will continue to work together towards normalising their relations and resolving their differences, including on Kashmir."

Although India's olive branch is viewed as an attempt to put the ball in Pakistan's court ahead of a South Asian summit in Islamabad in January, observers have warned it could fail unless carefully handled.

Leading Indian analyst Showket Ahmed said the Kashmir talks would only succeed if they included non-moderate separatists, while Pakistani political expert Mohammad Afzal Niazi stressed the need for direct dialogue on Kashmir.

"It is an impressive list of proposals designed to win over Pakistani public opinion but it falls short of meeting Pakistan's concept of a composite dialogue because it excludes Kashmir and Kashmir-related issues," Niazi said.

But the moves won overwhelming support from the sporting communities of the two nations, united in their passion for cricket.

"It is a great day for cricket," said the sport's Indian president Jagmohan Dalmiya.

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