Talks with Pakistan impossible if attacks persist: Vajpayee

"We would like to have meaningful talks but, if terrorist activities continue, that will not be possible," Vajpayee told a news conference in Jammu, winter capital of Indian Kashmir.

He was speaking after twin car bombings in Mumbai which killed 52 people and a spate of attacks in Kashmir, where India faces a separatist revolt in its only Muslim-majority state.

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Nuclear-armed India and Pakistan came close to war last year over Indian allegations, denied by Islamabad, that Pakistan is stoking Kashmiri militancy. Islamabad says it gives only moral support to the Kashmiri "freedom struggle."

But relations had been improving slowly after Vajpayee began a peace initiative in April.

"The process is slow, but that is the policy. We would like to go step by step," Vajpayee said.

Vajpayee said he would like to see two-way trade increase.

But peace talks were not possible without a return to normality in Indian Kashmir, hit this week by a spate of attacks which culminated in an overnight gunbattle between militants and security forces in the heart of the summer capital, Srinagar.

The gunbattle coincided with a visit by Vajpayee and other senior government leaders to Srinagar.

"Whatever happened the other day there is an indication that things are not yet normal. And without normalcy, how can there be talks?" Vajpayee said.

India did not blame Pakistan directly for the Mumbai blasts, which Islamabad condemned as "acts of terrorism." But police said they suspected an outlawed Indian students' organization, acting along with the banned Pakistan-based Kashmiri militant group, the Lashkar-e-Taiba. Police also blamed the Lashkar-e-Taiba for the attacks in Kashmir.

Indian and Pakistani troops also exchanged fire overnight across the Line of Control, a military line dividing the Indian and Pakistani armies in Kashmir,

A Indian police officer said on Friday two young boys, aged six and four, had been killed in the overnight shelling.

Echoing Vajpayee's comments, Indian Foreign Minister Yashwant Sinha said during a visit to Australia on Friday that talks would be meaningless unless violence ended.

"By all means, we are interested in friendship with Pakistan," Sinha told a news conference in Melbourne.