Pakistan believes that peace with India and Afghanistan is necessary for "effectively combating terrorism", Islamabad's ambassador to the US said in remarks published Saturday.

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There can also be no economic development without a peaceful neighbourhood, the Dawn newspaper quoted Jalil Abbas Jillani as saying in Washington.

"The prime minister (Nawaz Sharif) reached out to the two most important neighbours, India and Afghanistan, and this (has) led to a reduction in hostilities," said Jillani.

He pointed out that recent bilateral meetings had "a very good impact" on India-Pakistan relations.

These included Punjab Chief Minister Shahbaz Sharif's visit to New Delhi and the Pakistan prime minister's adviser on foreign affairs Sartaj Aziz's meeting with External Affairs Minister Salman Khurshid.

Jillani presented his credentials to the US State Department Thursday.