SRINAGAR: The People's Democratic Party "will not hesitate" to pull out of the alliance with the Hindu right-wing BJP in Jammu and Kashmir if the Centre led by Prime Minister Narendra Modi doesn't initiate dialogue to resolve the political dispute over Kashmir, sources said.

In a meeting of the PDP's core group at Srinagar following her parleys with Modi and Union Home Minister Rajnath Singh in the national capital, J&K Chief Minister Mehbooba Mufti is believed to have said that dialogue is important for restoration of peace in the state.

"Dialogue (with Hurriyat Conference and Pakistan) is part of the 'Agenda of the Alliance' between our party and the BJP. If the Centre doesn't initiate the process, I will not hesitate in stepping down. Without dialogue, it is difficult to restore peace," Mehbooba Mufti told the PDP's core group meeting, according to sources.

The Chief Minister however told the meeting, sources said, that the Government of India is willing to hold the dialogue but it first wants peace to be restored in the Valley, which has witnessed massive anti-India and pro-freedom demonstrations over the last month after the conclusion of Srinagar bypoll.

"Mehboobaji sought suggestions from the party leaders about the ways and means through which peace can be restored in the Valley. While developmental activity is going on at a fast pace in Jammu, Kashmir, our core constituency, is lagging due to frequent protests which isn't helping us," a senior PDP leader who attended the meeting said.

Mehbooba Mufti, who is also the PDP President, however, assured the party leaders that she has complete faith in the abilities of the Prime Minister and her government will complete its term while briefing them about her meeting with PM Modi and Union Home Minister Rajnath Singh.

The PDP meeting came hours after Mehbooba met the Prime Minister in the national capital and discussed the prevailing situation in Kashmir Valley. She had discussed the implementation of the alliance agenda with the PM and also sought compensation for losses suffered by the state on account of Indus Water Treaty.

Tensions are on the rise in the Valley with a senior PDP leader and Pulwama district president, Abdul Gani Lone, shot dead by unknown gunmen yesterday while on way to the summer capital Srinagar. He was declared brought dead at a hospital where he was rushed for treatment.

Fresh protests also broke out in Srinagar yesterday during which hundreds of students including girl students clashed with police and paramilitary forces in the heart of the city. Forces used teargas and batons to disperse protesters during which at least dozen persons, security personnel and students among them, were wounded.

The Valley remains on the edge following the killing of nine civilian protesters by government forces on April 9, the day when Srinagar Lok Sabha constituency went to bypoll, sparking widespread anger and protests. Student protests have added to the fires raging in the Valley during the last three months.