UN Secretary General Kofi Annan has condemned the terrorist attack on the Tourist Reception Centre in Srinagar housing passengers for the inaugural bus journey to Muzaffarabad.

"The introduction of this landmark bus service is a tangible achievement of the composite dialogue between India and Pakistan," he said in a statement on Wednesday.

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Annan noted that its beneficiaries would be people of the state who have been divided for decades and 'traumatised by violence'.

He commended the spirit of compromise demonstrated by both India and Pakistan in starting the service and expressed the hope that it would lead to 'additional confidence-building arrangements followed by substantive agreements on all outstanding issues, including Jammu and Kashmir'.