"We believe the way forward for the two countries is to resume the stalled composite dialogue process at the earliest," Zardari said.
He said that Pakistan wanted to transform bilateral relations with India into a friendly and cooperative partnership through resolving of outstanding disputes.
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"Our new democratic government has exercised restraint," Zardari said, adding that, "the Prime Minister is committed to peaceful relations with India and has stated that his government will continue to exercise restraint."
Zardari made the remarks while speaking at a dinner hosted in the honour of Islamabad-based diplomats here at the Presidency to thank them for their support and cooperation during the past five years.
Zardari will demit office on September 8.
He said that Pakistan sincerely desires to establish durable peace and stability in the neighbourhood.
"We need peace and stability to realise the vast potential of mutually beneficial cooperation in diverse fields," he said.
As Afghanistan's closest neighbour, Pakistan has borne the brunt of the crisis in Afghanistan in the past over three decades, he said.
"The cost for Pakistan has been enormous. We have been hosting the largest number of refugees in the world over several decades. We have endured the inflow of drugs and weapons," he was quoted as saying by the state-run APP news agency.
The Pakistani President said the cost for Pakistan has been huge, in both blood and material losses.
"History has proved that the destinies of our two countries are inter-linked," he said.
"Our dreams of peace and prosperity cannot be realised as long as Afghanistan remains in turmoil. It is for these reasons that helping restore peace and stability in Afghanistan remained on top of our agenda during the past five years," he added.
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