Musharraf made the appeal at an international donors' conference called to raise money for the recovery effort after last month's quake, which killed nearly 74,000 people, most of them in Pakistan's zone of Kashmir.

"Let us together solve the Kashmir dispute once for all," Musharraf said in an address to the conference, which included a ministerial-level delegation from India.

"Let this be the Indian donation to Kashmir," he said to applause from about 300 delegates.

He spoke as 30 Indian Kashmiris were set to cross to the Pakistani side of the state, which was divided by the Line of Control in 1949, to search for surviving relatives of the October 8 disaster.

The earthquake, which also killed 1,300 people in Indian Kashmir, led the estranged neighbours to open all five border posts on the de facto frontier for the first time, but initially only for the exchange of relief goods.

The six-week delay in allowing civilians to traverse the border to help relatives and friends, with the suspicious neighbours wanting to vet those allowed to make the crossing, angered Kashmiris on both sides.

Musharraf said the earthquake had provided a rare "fleeting opportunity" to heal the relationship between the two South Asian nations.

"If leaders fail to grasp fleeting opportunities, they fail their nations and they fail their people.

"Let good and success and let happiness emerge from the ruins of this catastrophe, especially for devastated people of Kashmir," he said.

"I sincerely and genuinely believe that the challenge of this earthquake can be converted into an opportunity of a lifetime that was never available to India and Pakistan to improve its relations," the military leader said.

The Indian representative at the conference, State Minister for External Affairs E. Ahmed, reiterated India's commitment to confidence-building measures between the neighbours.

"The spontaneous outpouring of support and goodwill for the victims of the earthquake gives us the strength and motivation to work (towards) confidence-building measures between our two countries," Ahmed told the meeting.

"On Kashmir our position is well known ... (to live) in an atmosphere free of terrorism and violence," he said, in an apparent reference to Islamic insurgency in Indian Kashmir.

India pledged 25 million dollars towards the quake assistance effort at a conference in Geneva on October 26. International donors at that meet promised 580 million dollars in assistance.

Pakistan and India, both nuclear powers, each hold part of Kashmir but claim the Himalayan state in full. They have fought two of their three wars over the territory.

Pledges at Saturday's meeting were roughly 5.4 billion, Prime Minister Shaukat Aziz said, exceeding the 5.2 billion dollars Pakistan said it needed for reconstruction and relief after the tremor.

Aid agencies have said it is urgent to step up the relief operations before the harsh Himalayan winter claims more lives.

Tensions between India and Pakistan have been exacerbated by the 16-year insurgency by Islamic militants against New Delhi's rule in the Indian zone.

The violence has claimed more than 44,000 lives, with India accusing Pakistan of supporting the militants, which Islamabad denies.

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