Al Qaeda [Images] has 'no place' in Pakistan and it cannot be allowed to operate and commit acts of terrorism 'here or elsewhere', president Pervez Musharraf [Images] said on Thursday.

Blaming internal and external elements for conspiring to destabilise Pakistan, he vowed that they would be defeated with the support of the people.

Terrorism and extremism would also have to be defeated as they pose a grave danger to the country and its economic growth, Musharraf told the weekly 'Aiwan-e-Sadr Say' programme on state-run PTV. Suicide bombers were 'misguided and mad people' as they were killing innocent people, he added.

Reiterating the government's resolve that terrorists cannot be allowed to commit acts of terror from its soil, Musharraf said those harbouring terrorists would face stern action. He said the people of Pakistan are moderate and they reject extremism.

"We can surmount all difficulties, (but) we need to have confidence in ourselves and faith in our abilities and we have to defeat such elements," he said while speaking on the topic 'challenges confronting Pakistan and the way forward'.

He said, "There is no place for Al Qaeda in Pakistan. We cannot allow Al Qaeda to operate and commit acts of terrorism here or elsewhere".

"There is some demoralisation in the air as a negative picture of Pakistan is being portrayed by the media, especially in the West," he said, urging the people not to be swayed by such 'propaganda'.

Musharraf said the three most important challenges facing Pakistan are terrorism and extremism, completing the final phase of the transition to full democracy, and sustaining socio-economic growth.

Referring to the government's multi-pronged strategy to defeat extremism and terrorism, he said those involved in terrorism would be killed, but their sympathisers would be dealt with politically and through development indicatives.

"At the same time, banned militant groups will not be allowed to re-surface," he said.

"The general election will be held on February 18 in a fair, free and transparent manner and in a peaceful atmosphere. Peace will be maintained across the country by the army and Pakistan Rangers, who have been given shoot-at-sight orders," he said.

Musharraf said the country has a strong and robust economy, fast growing industrial and agricultural sectors, continued inflow of foreign investment and remittances and satisfactory revenue collection, while the stock exchanges too were performing well. He was confident that despite the recent turmoil, the target of 6.8 per cent growth rate would be achieved in 2008.

He said the agreement for the Iran-Pakistan gas pipeline project would be signed soon as most of the details are finalised.

Musharraf reiterated that the government would not allow any intervention in Pakistan by foreign forces. "The country has strong armed forces capable of carrying out operations against terrorists and it would only seek outside assistance if and when needed," he asserted.

Referring to reports in the Western media about the safety of Pakistan's nuclear assets, the president categorically rejected such concerns and said strong custodial control of the atomic weapons had been put in place under the Nuclear Command Authority and the Strategic Plans Division.

"The nuclear assets have been dispersed at different locations with state of the art electronic security systems," he said.

He said the Rs 12 billion to Rs 14 billion which is paid as subsidy per month on account of oil, is an enormous burden on the economy. He said that electricity too is being subsidised and the government is bearing a bill of Rs 51 billion per month on this account.

"The government will go in for hydro and nuclear power generation to overcome the shortage of energy," he said.

Musharraf said terrorism could possibly affect the turnout in the forthcoming general election, but he called on people to come out and vote.

"All political parties must evolve a national consensus to meet the challenges confronting the country," he said adding that he has been stressing the need for political reconciliation and good governance.