No war if power balance maintained: Musharraf

However, recent arms purchases by India could alter this balance, Musharraf told a gathering of Californian investors and lawmakers, Daily Times reported on Sunday from Los Angeles.

Musharraf also maintained that Kashmir remained the core dispute between India and Pakistan and in its resolution lay the key to peace in South Asia.

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"Pakistan is not for war, we desire peace and harmony and want a composite dialogue for resolution of all outstanding disputes including Kashmir."

Referring to the arms deals India had recently negotiated, he cautioned that the balance of power in conventional weapons should not be disturbed. "India has increased its defence budget by 15 per cent. It has a multi-billion dollar weapons acquisition programme with several countries including the US, Russia, Britain, France and Israel. While Pakistan is under sanctions, please do not disturb the conventional balance and I mean every word of it," he asserted.

On Kashmir, Musharraf said Pakistan would deal with India on the basis of sovereign equality.

"India may be a big country, but we are not a small country. Like any other country we will defend our sovereignty," Musharraf maintained.

Welcoming the recent peace overtures by Indian Prime Minister Atal Bihari Vajpayee, he said Pakistan would not be found wanting on the way forward.