According to Associated Press, the Pak admission comes after weeks of ``denying its ability to withdraw'' armed intruders from Kargil. The Pak Army earlier this month said its soldiers moved to occupy previously unoccupied posts opposite Indian-held Kashmir's Kargil and Drass areas. However, the army insisted the posts were located on the Pakistan side of the 1972 cease-fire line in Kashmir. Musharraf's statementsfollowed meetings with US Gen. Anthony Zinni, who delivered a message from Clinton demanding Pakistan withdraw the militants from Kashmir. Zinni also met Sharif on Friday but a Foreign Ministry statement indicated the meeting ended in a stalemate, with Pakistan pressing for a final settlement to the Kashmir dispute. Musharraf told reporters that efforts were being made for a meeting between Sharif and Clinton to be held ``soon.'' However, the Army chief did not say when or where the meeting would be held.

``Obviously we do not want to escalate the situation and I am sure India doesn't want to escalate it,'' he said. ``Therefore, we want to reach a solution that is mutually acceptable to us and to India.''

Musharraf claimed that there were two issues: ``There is the tactical military issue of Kargil and Drass and the political dimension of Kashmir and both have to be tackled together.''