"The prime minister has an intention of holding talks after the situation becomes normal," Mehbooba told reporters after the meeting.
At the meeting, she invoked former Prime Minister Atal Bihari Vajpayee's policy on Kashmir, and said the thread should be picked up from where he had left off -- an apparent suggestion for talks with separatists.
"However, an atmposphere needs to be created for a dialogue. Talks cannot happen amid stone pelting and firing of bullets," she said.
During the 20-minute meeting at Modi's residence here, Mehbooba briefed the prime minister on the situation, particularly in the increase in violence since the April 9 by-poll for the Srinagar Lok Sabha constituency.
"Talks with Hurriyat (Conference) had taken place when Vajpayee ji was the Prime Minister and L K Advani ji was the Deputy Prime Minister. We need to start from where Vajpayee ji left. Talks are the only way out," she said.
Rising tensions between the coalition partners, the PDP and the BJP, over the handling of the security situation in Kashmir also came up at the meeting.
"Whatever happened should not have taken place. But this is an internal matter and we will resolve it with the BJP," she said.
Referring to the increase in stone-pelting incidents in the Valley, she said there were some young people who were "disillusioned" while some were being "instigated", often through the use of social media sites such as Facebook and Whatsapp.
The Jammu and Kashmir Chief Minister said the issue would be discussed in the meeting of the Unified Command tomorrow.
She also raised the Indus water treaty issue, saying it was causing a huge loss of Rs 20,000 crore to the state.
Mehbooba said the prime minister assured her that efforts would be made to see how the state would be compensated for this.
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