The Indian Prime Minister, Atal Behari Vajpayee, has launched a strong attack on Pakistan at a political rally to mark three years in power for his party.

We have to eliminate this demon of terrorism

Atal Behari Vajpayee

In his first public appearance since he was taken ill last week, he said Pakistan was emerging as a "terrorist state."

This "demon of terrorism" has to be elimated, he said.

Mr Vajpayee's speech came a day after India announced it had begun the withdrawal of soldiers from its border with Pakistan, ending a 10-month military stand-off.

Tension between the two countries had caused widespread international concern.

World 'concern'

In his speech to a group attended by politicians from his National Democratic Alliance coalition, Mr Vajpayee said that Pakistan "does not hesitate to send fidayeen [suicide squads] into our country across the border to kill innocent women and children."

Mr Vajpayee also said economic conditions were improving

He said India had been fighting terrorism for 20 years "and the world had not paid enough attention."

But he said the international community was now waking up, particularly after the bombing earlier this month of a Bali nightclub which killed at least 190 people.

The BBC's Adam Mynott in Delhi said Mr Vajpayee appeared refreshed after his illness.

He had suffered a viral infection, which some observers claimed was a "tactical illness" to avoid political in-fighting.

Mr Vajpayee denied this.

"I had a sore throat in Lucknow and I did not speak. The next day I saw in newspapers 'Vajpayee ran away from Lucknow.' Lucknow is my terrain - why would I run away?"

Lowering tensions

On Thursday, Defence Minister George Fernandes told journalists the military pullback from the border could be over within two months.

Tensions rose after the Delhi parliament attack

The two countries massed nearly a million troops along their border after a raid on India's parliament last December that Delhi blamed on Pakistan-based militants fighting Indian rule in Kashmir.

Pakistan denies giving them military support, but says it gives moral and diplomatic backing to what it calls the freedom struggle of the Kashmiri people.

Last week, the two neighbours both announced their intention to pull troops out, after concerted international pressure helped lower tensions.

Mr Vajpayee said the economic condition of the country had improved over the years.

Commenting on the recent assembly elections in Indian-administered Kashmir he said the government had been successful in conducting them in what he termed a "free and fair" manner.

He also said communal violence, which took place in the western state of Gujarat, should not be repeated.