The understanding came at a meeting between Foreign Minister Hina Rabbani Khar and her Swedish counterpart Carl Bildt in Islamabad on Wednesday.

Later addressing a joint news conference Bildt lauded Pakistan's foreign policy and efforts to bring stability and prosperity in Afghanistan.

He said Pakistan's role in Afghanistan is important and his country would continue to support it. He said Sweden will continue to support the dialogue process between Islamabad and Kabul to achieve their goals.

He said he is glad while visiting a democratic Pakistan and his country is willing to develop political dialogue. He said his country provided humanitarian assistance to Pakistan in the destructive floods.

He said his country would continue to work to provide access to Pakistani goods in the European Union countries. He said he had very constructive and useful talks with the Pakistani officials.

Bildt said that now the Afghan National Army has got training and is maintaining law and order situation. He said his country's support would be intensified during the period of transition in Afghanistan.

He said now Afghan security forces are working well.

To a question he highly regretted the Kandahar incident in which innocent people were killed but said it would not have any impact on his country's policy in Afghanistan.

Addressing the news briefing Foreign Minister said, "President Asif Ali Zardari has already said that the solution of the most of the problems would be increasing our volume of trades with the international community, especially with European Union."

She described her meeting with the Swedish foreign minister as useful and said "we will continue to work to increase our bilateral relations and to increase our trade."

She said, "we have a heavy agenda and want to develop our relations on people to people contact."

She said Sweden will help Pakistan in the Renewal Energy Sector and to support us in the construction of small and medium dams.

She said a mechanism is being developed to increase Swedish investment in Pakistan.

Hina Rabbani Khar said that an investor from Sweden had invested 100 million dollars in Pakistan in 2010.

Foreign Minister Khar said that a five year plan has been cleared with the European Union and "we want that this plan should be institutionalized".

She said, "we need more access to the European Markets to import our industrial goods.

On Afghanistan, Hina Rabbani Khar said that it was discussed at the meeting and Pakistan supports a process of Afghan led, Afghan owned peace process in that country.

She said the Parliamentary Committee is considering new terms of engagement with the United States, ISAF and NATO and will follow such a policy which should have ownership of people.

She said, "The policy would be more robust and applicable when it has the support of our people and we will apply it easily and it should be reflective of mutual interest and mutual respect."

To a question about the Iran-Pakistan-India gas pipeline foreign minister Khar said, "We will adopt such a policy which should be in our interest."

She said Economic Coordination Committee has already set a committee to look into the said matters and report to the committee.

She said, "Pakistan and Sweden are democratic countries and we need that parliamentary support in our relations."