NEW DELHI (AP) — India's prime minister said Monday a major diplomatic effort was under way to improve ties between India and Pakistan, and that he was hopeful the talks would succeed.

Prime Minister Manmohan Singh's comments came three weeks after he and Pakistani Prime Minister Yousuf Raza Gilani agreed to resume peace talks and work toward rebuilding trust shattered by the deadly 2008 Mumbai terror attacks that New Delhi blamed on Pakistani militants. The two men had met at a regional summit in Bhutan.
“A major effort is being made to bridge the trust deficit with Pakistan,” Singh told reporters at a rare news conference.
He also reiterated India's willingness to discuss “all outstanding issues” — a phrase seen as diplomatic code for the bitter dispute over the Himalayan region of Kashmir — as long as Pakistani territory is not used for attacks against India.
India and Pakistan have been under pressure to resume their peace dialogue, which had eased historic tensions though it did not resolve the key issue of Kashmir, which both nations claim in its entirety. The dispute sparked two of the three wars between the two countries since they gained independence in 1947.
Singh, an economist by training, said peace with its neighbors was essential for India to achieve its economic potential.
Regardless of the outcome of peace efforts, he predicted India's economy would grow by 8.5 percent this year and by an astonishing 10 percent in the coming years.
Photo: India's Prime Minister Manmohan Singh speaks during a news conference in New Delhi May 24, 2010.