Relations have been strained between the nuclear-armed neighbours since 166 people were killed in 2008 attacks in Mumbai blamed on the outlawed Lashkar-e-Taiba (LeT) extremist group, which is based on Pakistani soil.

"We want friendly relations with Pakistan. But we know this will be possible only when our neighbour will see to it that its territory is not used for terrorist activities against us," Singh told a ruling Congress party meeting.

India is still pressing Pakistan to bring to justice the alleged masterminds of the attacks in which 10 Islamist gunmen attacked a host of targets including luxury hotels, a Jewish centre and a train station. Nine of the gunmen were killed and the sole survivor was condemned to death by a Mumbai court in May.

Singh's remarks came as the Congress party passed a resolution that called on Pakistan to "deliver with sincerity on its assurances to dismantle terror outfits."

India and Pakistan have fought three wars, two over the disputed Himalayan state of Kashmir where an insurgency has been under way against New Delhi's rule for more than two decades.

Singh also said there was "great potential for working together with China, especially in economic matters."

Speaking on the heels of last week's visit by his Chinese counterpart to New Delhi, the prime minister said India has "some outstanding issues with them (the Chinese) which we hope to resolve in an atmosphere of friendship."

Last week, Singh and Chinese Premier Wen Jiabao agreed to double bilateral trade to 100 billion dollars by 2015.

But the two sides failed to make any apparent headway on a series of key disputes, including a long-festering border row.

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