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Friday, 16 March, 2001, 13:56 GMT
Annan upbeat on Kashmir
Kofi Annan (R) shakes hands Indian Foreign Minister Jaswant Singh
Behind the smiles, India's Government is in crisis
By Jill McGivering in Delhi

United Nations Secretary-General Kofi Annan says he has been encouraged by talks with Indian and Pakistani officials on seeking a settlement in Kashmir.

... the only way out is through dialogue, the only way out is through negotiations

Kofi Annan
Speaking in Delhi on the final leg of a regional tour, Mr Annan described both sides in the long-running dispute as open to formal dialogue on the disputed territory.

Mr Annan emerged with a positive message after meeting India's External Affairs Minister Jaswant Singh.

But despite the optimism, his visit has been largely overshadowed by India's continuing political crisis, sparked by allegations of widespread high-level corruption.

Violence escalates

"I am encouraged by the discussion in which your foreign minister has also said that the only way out is through dialogue, the only way out is through negotiations," Mr Annan told reporters.

India Communist Party demonstration
Political turmoil has overshadowed Mr Annan's visit
Mr Annan has urged both India and Pakistan to abide by the 1999 Lahore declaration, in which they agreed to resolve the Kashmir issue through dialogue.

Despite India's recent extension of a unilateral ceasefire in the troubled region, violence involving security forces and Muslim militants has escalated.

The issue has been high on Mr Annan's agenda during his tour of Pakistan, Nepal, Bangladesh and India.

Outrage at Taleban

But any progress on Kashmir has been overshadowed by other issues.

In Pakistan, the focus shifted to his meetings with Taleban leaders as the international community expressed outrage about the destruction of priceless Buddhist statues and artefacts.

In Delhi, it happened again.

The UN chief arrived amid deepening political turmoil in the country, sparked by an undercover investigation by website reporters posing as arms dealers.

Prime Minister Atal Behari Vajpayee's ruling coalition has been under pressure since the website released secretly filmed video footage of senior officials taking cash in connection with a bogus arms deal.

The corruption scandal has already forced several dramatic resignations, including that of Defence Minister George Fernandes on Thursday.

Analysts say his departure could have been an attempt to limit the political damage, but so far there is little sign of that.

Mr Annan was forced to cancel a planned visit to parliament, which was adjourned for a fourth day after angry opposition members called on the government to resign.

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See also:

16 Mar 01 | South Asia
Arms scandal paralyses India
12 Mar 01 | South Asia
India says Kashmir talks 'soon'
12 Mar 01 | South Asia
Afghan refugees 'not forgotten'
07 Mar 01 | South Asia
India rejects Kashmiri mediation
22 Feb 01 | South Asia
Kashmir ceasefire extended until May
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