At an interaction with a group of editors here, he emphasised the need for India to keep talking to Pakistan and keep that country engaged.
However, he said he was not satisfied with actions taken by Pakistan in dealing with terrorism emanating from its soil.
The Prime Minister said although Pakistan continues to say that it does not provide state support to terrorism, Jaish-e-Mohammad and Lashkar-e Taiba were off-shoots of ISI. Terrorism should not be an instrument of state policy.
About China, he said that the Indian media should not sensationalise differences with that country. He had dealt with the present leadership of President Hu Jintao and Prime Minister Wen Jiabao whom he regards as men of peace.
At the same time, the Prime Minister said India could not compromise on the issue of Arunachal Pradesh to which China lays claim and on river systems.