ISLAMABAD, Oct 10: German Chancellor Gerhard Schroeder on Sunday called for dialogue among different civilizations and creating economic stability the world over to win the war on terrorism.

Talking to journalists after holding talks with Prime Minister Shaukat Aziz at the Prime Minister's House, the German chancellor said terrorism could not be fought with police and military alone

"We must do something to promote dialogue among different civilizations to isolate the menace of terrorism on ideological grounds and work for unfolding a comprehensive global development strategy to remove a sense of deprivation."

"We must do everything possible to track terrorists down and arrest them," the visiting German leader said, stressing that the international community must work together to deny the terrorists both the ideological and material grounds.

Prime Minister Shaukat Aziz endorsed Mr Schroeder's views. "I believe that the feelings of deprivation have to be addressed to choke the lifeline of terrorism," he said.

"We need to cooperate with each other to create an element of stability and predictability in the world," he added. Mr Schroeder said terrorism would not win the ongoing war.

"I do not think it will ever happen," he said when asked whether the confusion created by the closing of diplomatic missions and issuance of travel advisories by some countries meant terrorists were winning the war.

Prime Minister Aziz expressed the confidence that strict security measures, visa regularizations and stringent enforcement of immigration law in Europe to check terrorism would not in any way stop or impede cooperation between countries committed to going along these lines.

"We have discussed this issue which we both take as a challenge for the world and we need to look at its underlying causes." Asked about his talks with Prime Minister Aziz, Mr Schroeder said a team of industrialists accompanying him 'will surely be interested in exploring avenues of investment in Pakistan'.

"We have discussed various aspects of economic cooperation and to find ways and means for enhancing our mutual cooperation in the trade and industrial relations with main focus on helping out Pakistan to attain development and progress," he said.

In a comment on Saturday's presidential election in Afghanistan, Mr Aziz said: "I think this election will auger well for Afghanistan and we are confident that the step will lead to give a better future to that country."

He said: "We want to see a strong, stable and economically viable Afghanistan." The prime minister said that Pakistan's relations with Afghanistan had grown in every field as the trade volume between the two countries had risen to $1.2 billion in past one year.

The German chancellor and Prime Minister Aziz also exchanged views on Pakistan-India dialogue and regional situation. The prime minister told the German leader that the process of composite dialogue with India had taken positive strides and last month's meeting of President Musharraf with the Indian prime minister in New York was seen as path breaking.

He said that he would visit India next month to hold talks with the Indian prime minister during which, among other things, the Kashmir issue would also be discussed. "We are a peace-loving nation and striving hard to bring peace and stability to the region," he added.

Mr Aziz said Pakistan believed that a gas pipeline from Qatar to India would benefit the Indian economy and Pakistan was ready to give a secure passage to the proposed pipeline.

Mr Schroeder said his country wanted progress in talks between Pakistan and India and in their bilateral relations as it would help improve the situation in the region. Mr Schroeder appreciated Pakistan's role in the war on terrorism and the country's economic reforms which, he said, were showing positive results.

The Pakistani side briefed the German delegation on steps being taken to upgrade and modernize the country's textile sector to make it more competitive in the international market. Prime Minister Aziz appreciated Germany's close cooperation in the economic and social sectors and called for the enhancement of German investment in Pakistan.

Foreign Minister Khurshid Kasuri, Commerce Minister Humayun Akhtar, Minister of State for Economic Affairs Hina Rabbani Khar, Foreign Secretary Riaz Khokhar, Minister of State for Finance Omar Ayub and economic affairs secretary assisted the prime minister in his talks with the German delegation.

Pakistani and German officials also signed a soft loan agreement as part of their 'ongoing bilateral development cooperation'. Under the agreement, Germany will provide a soft loan of 22.23 million euros ($27 million) for development of a medium-size hydropower project.