ISLAMABAD, Jan 26: President Pervez Musharraf, blaming individual scientists and the world black market for nuclear proliferation, pledged "harsh" punishment on Monday for scientists who allegedly sold secrets to Iran and other countries.

"We will punish them. And we will be very harsh with them because they are enemies of state and they have done something for personal and financial gain," Gen Musharraf told the BBC in an interview.

On Kashmir, he said, a solution "somewhere midway," acceptable to India, Pakistan and the people of Kashmir, could work. "The two sides would have to meet somewhere midway," he said.

On suspected transfer of nuclear technology, President Musharraf rejected reports that have named a former military chief Gen Aslam Beg as approving the transfer to Iran under the former successive governments of prime ministers Benazir Bhutto and Nawaz Sharif.

Gen Musharraf and other officials have repeatedly said that no government or military institutions were involved in sharing nuclear secrets. He said on Monday "some unscrupulous individuals" might have taken advantage of the autonomy given to the Khan Research Laboratories (KRL).

"Within that ambit of that autonomy and security some unscrupulous individuals may have gotten involved." He said they could have acted "unilaterally, without the knowledge" of then governments or military chiefs.

President Musharraf in several weekend remarks pointed to an international black market of nuclear technology traders, complaining that only Pakistan has been under the media's spotlight.

"I take exception to this issue, fingers are pointing at Pakistan. They are pointing at individuals in Pakistan, as much as they are pointing at individuals in Europe," he said. "But I don't know why people are talking about Pakistan only, what about the individuals in Europe, and I know that there has been found in Europe (people) involved in the fabrication of the equipment, and that needs very high technology."

Discussing his concept of a settlement of the Kashmir issue, he said: "I have been talking of a four-step solution. That we start talking first of all, accept the reality of Kashmir, secondly and then eliminate whatever is unacceptable to India, Pakistan and Kashmir.

"And then out of the balance go for a solution acceptable," he said. However, he made it clear that the idea of the Line of Control being turned into an international border was unacceptable to Pakistan. "We have fought wars over this Line of Control," he said. "So a dispute cannot be a solution. Certainly not."

The president said, however, that the environment in both countries was conducive to a solution to the problem. "The public (in India), the vast majority want peace and harmony with Pakistan and they want a solution of all disputes. "I think we have to be bold and go forward." He clarified, however, that Pakistan had issued no instructions to militants fighting Indian rule in Kashmir.

"No orders have been issued at all," he said. "They are not under our control." President Musharraf has recently escaped two assassination attempts which he blamed on Al Qaeda network. But he ruled out suggestions that any Kashmiri militant group was involved. "This has nothing to do with whatever is happening in Kashmir. Al Qaeda has nothing to do with Kashmir."

He said Pakistani forces had come across members of the group in one of the tribal agencies in the country's north-west, along the Afghanistan border. "One of them, the South Waziristan Agency, is the place where we have encountered Al Qaeda."

"They are on the run and they are hiding (but) are not in communication with each other - they are not in contact with each other. So I don't at all think that a strategic threat can develop," he said.-Agencies