Saudi Crown Prince Mohammed bin Salman said dialogue was needed to resolve heightened friction between arch-rivals Pakistan and India during a meeting in Riyadh with visiting Pakistani Prime Minister Shehbaz Sharif.

Sharif was making his first overseas visit since winning power in elections in February. He met with bin Salman on Sunday.

"The two sides stressed the importance of dialogue between Pakistan and India to resolve the outstanding issues between the two countries, especially the Jammu and Kashmir dispute to ensure peace and stability in the region," a joint statement released by Pakistan's foreign office and the Saudi government said.

The disputed Himalayan region of Kashmir is claimed in full, though ruled in part by both India and Pakistan since independence from Britain in 1947, with the neighbours having fought two of their three wars over it.

Always-fragile relations between India and Pakistan have worsened since a 2019 suicide bombing of an Indian military convoy in Kashmir was traced to Pakistan-based militants, leading New Delhi to carry out an airstrike on what it said was a militant base in Pakistan.

Indian Defence Minister Rajnath Singh said on Friday that India would enter Pakistan to kill anyone who escapes over the border after trying to carry out militant activities in the country.

The minister was speaking a day after Britain's Guardian newspaper published a report stating the Indian government had killed about 20 people in Pakistan since 2020 as part of a broader plan to eliminate militants residing on foreign soil.

India has longstanding friendly relations with Arab countries including Saudi Arabia, which have strengthened under Prime Minister Narendra Modi who is widely expected to win a third term in office in elections starting April 19.

Sharif and bin Salman had also discussed expediting a planned $5 billion investment package, which cash-strapped Pakistan desperately needs to shore up its current account deficit and signal to the International Monetary Fund that it can continue to met requirements for foreign financing that has been a key demand in previous bailout packages.

Pakistan said in January it had credible evidence linking Indian agents to the killing of two of its citizens on its soil. India said it was "false and malicious" propaganda.

(Reporting by Charlotte Greenfield; Editing by Angus MacSwan)