Azhar was recently released from detention
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Indian Deputy Prime Minister LK Advani, has welcomed a Pakistani ban on a militant leader from entering Pakistani Kashmir.
Masood Azhar - head of the outlawed group, Jaish-e-Mohammad - was barred from addressing a religious conference in the region on Thursday.
Mr Advani said he hoped the move reflected a change in Pakistan's attitude towards the Kashmir dispute.
His comments followed renewed efforts by India and Pakistan to open a dialogue over Kashmir which is divided between the two countries.
"If this ban on Azhar's entry is any index of a beginning of a change, it is welcome," Mr Advani said.
Pakistan's move came less than a week after the US Deputy Secretary of State Richard Armitage visited the region.
Key figure
Mr Azhar has been one of the key figures fighting against Indian rule in Kashmir.
India accuses Pakistan of fomenting militancy in Kashmir
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He was released by the Indian authorities in exchange of the passengers of an Indian airliner hijacked to Afghanistan in December, 1999.
India accuses Jaish-e-Mohammad and Lashkar-e-Toiba of being involved in the attack on its parliament in 2001.
Pakistan says the ban on the militant leader has been implemented to maintain law and order in the region.
The two groups were declared as terrorist organisations by the United States and banned in Pakistan after the Delhi parliament attack.
Detention
Masood Azhar was due to address a conference to mark the birthday of the Prophet Mohammad on Thursday in the southern district of Kotli in Pakistan-administered Kashmir.
He was due to visit the area for the first time since being released from one year's detention last December.
It is the first time the authorities have taken such action.
The former chief of the banned Laskar-e-Toiba, Hafiz Mohammad Sayeed, visited the territory three times following his release in November last year and addressed his followers.
The move has come as relations between India and Pakistan have improved following more than a year of tension which took the two countries to the brink of war.
Pakistani Prime Minister Zafarullah Khan Jamali and his Indian counterpart Atal Behari Vajpayee recently broke the deadlock and have decided to restore diplomatic ties and transport links.
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