INDIA - India's Prime Minister Manmohan Singh heralded Thursday the opening of a "new chapter" in a peace process to end a two-decade-old revolt in Indian-held Kashmir.

Winding up a two-day trip to the Muslim-majority Kashmir valley, Singh reiterated his government's willingness to hold talks with all separatist groups opposed to Indian rule as long as they renounced violence.

"I believe that a new chapter is opening in the peace process in the state and we are turning a corner," Singh told a news conference in Indian Kashmir's summer capital Srinagar.

"We are willing to engage in serious discussions with every group provided they shun the path of violence," Singh said as he announced a series of economic measures to boost the region's economy.

Last month, Indian Home Minister P. Chidambaram offered to start a "quiet dialogue" with separatist politicians in the disputed region.

The offer was welcomed by local moderates but rejected by hardliners.

Moderate separatist leaders in the Muslim-majority state have held several rounds of talks with India's central government, though hardliners oppose any contact that does not involve neighbouring rival Pakistan.

Nuclear-armed India and Pakistan each hold part of the Himalayan region and claim it in full.

The insurgency against Indian rule in Kashmir, which New Delhi accuses Pakistan of arming and abetting, has claimed more than 47,000 lives.

The Kashmir separatist alliance All Parties Hurriyat (Freedom) Conference opened talks with the Indian government in 2004, the first since the eruption of a revolt against Indian rule two decades ago in the region.

The last round of Kashmir discussions took place three years ago.

Levels of violence have declined sharply in the Muslim-majority region following the launch of a peace process by India and Pakistan in 2004.

But India suspended the dialogue in the wake of last year's attacks on Mumbai which were blamed on Pakistan-based militants.