KATHMANDU: Nepal on Saturday became the first South Asian nation to offer to "mediate" between India and Pakistan over Kashmir and cross-border terrorism with a Nepal government source underlining the importance of dialogue between the two arch-rivals to resolve their differences that could also lead to the revival of the SAARC.Tensions between India and Pakistan have spiked since India abrogated Article 370 of the Constitution to revoke the special status of Jammu and Kashmir in August last year. India's decision evoked strong reactions from Pakistan, which downgraded diplomatic ties and expelled the Indian envoy."Peaceful talks and discussions are the best ways to resolve any problems. There may be contradictions and differences but it can be resolved through dialogue. If necessary, we can play the role of the mediator as Nepal is an independent, neutral and peace loving country," the source said here.The source, however, said that better solution to resolve the issues would be to develop better dialogue between two countries."We can be instrumental, but it will be better (for the two sides) to develop direct contact," the source told a group of visiting Indian journalists.Earlier this week, US President Donald Trump repeated his offer to "help" resolve the Kashmir issue between India and Pakistan during his meeting with Prime Minister Imran Khan on the sidelines of the World Economic Forum in Davos, Switzerland.New Delhi maintains that there is no scope for any third-party mediation between India and Pakistan over Kashmir."When we come together, sit together and share views then things will be resolved. In every situation, we have to sit together and try to resolve the problem otherwise things can be deteriorated," the Nepalese source said.Expressing concern over the uncertainty prevailing over the South Asian Association for Regional Cooperation (SAARC) summit, the source said the eight member grouping should be revitalised and misunderstandings should be removed."SAARC is not dead. It is alive. Only thing is that we have not met. Hope we can revive it," he said.The last SAARC Summit in 2014 was held in Kathmandu , which was attended by Prime Minister Narendra Modi The 2016 SAARC summit was to be held in Islamabad . But after the terrorist attack on an Indian Army camp in Uri in Jammu and Kashmir on September 18 that year, India expressed its inability to participate in the summit due to "prevailing circumstances".The summit was called off after Bangladesh, Bhutan and Afghanistan also declined to participate in the Islamabad meet.In the last three years, India has been distancing itself from the SAARC, citing security challenge facing the region from terror networks based in Pakistan, which is also a member of the grouping.Nepal is still the Chairman of the SAARC because of the postponement of the 2016 summit in Islamabad.On Friday, Nepal's foreign minister Pradeep Kumar Gyawali said his country is "ready and eager" to handover the position to Pakistan.The source said that there was no link between SAARC and terrorism, a major issue between India and Pakistan that led to the cancellation of the 2016 summit."We are strongly against all forms and manifestations of terrorism. But there is no relationship between the two (SAARC and terrorism). We cannot connect the two issues," the source said.Nepal, India, Pakistan, the Maldives, Bhutan, Bangladesh, Sri Lanka and Afghanistan are the members of the SAARC.Identifying terrorism as a common threat to peace loving countries, the source said, "We have to deal with the issue of terrorism"."I think that misunderstandings should be narrowed down and SAARC should be revitalised. It would be better to revise SAARC. I have told India that SAARC should be revitalised. We can find out amicable solutions," the source said.SAARC summits are usually held biennially and hosted by member states in alphabetical order. The member state hosting the summit assumes the Chair of the Association.On the boundary issue with India, the source said the two countries can discuss any issue based on "truth, evidences and facts".India in November released fresh maps of the newly-created union territories of Jammu and Kashmir, and Ladakh. In the maps, Pakistan-occupied Kashmir is part of Jammu and Kashmir, while Gilgit-Baltistan is in Ladakh.Nepal claimed that Limpiyadhura, Lipulek and Kalapani areas were shown under India's territory even though they lie within the Nepalese territory.India has said the new map accurately depicts its sovereign territory and it has in no manner revised its boundary with Nepal."We can resolve any issue if we discuss. Sometimes some issues are left unresolved. We should not keep something in mind and don't speak out. This is not the situation now," the source said."We can share and discuss openly, including on the border issue. We are developing our friendly ties in a new track and depth," he said, adding that the leaders of the two sides have developed very good relations and taken the bilateral ties to the next level.On National Register of Citizens (NRC) and its possible impact on Nepali speaking people and Gorkhas, the source said Nepal has been reassured by the statement of defence minister Rajnath Singh that it would not have any impact on them."This is an issue of India and the people of India and they will resolve themselves," he added.