Ahead of Prime Minister Manmohan Singh's meeting with his Pakistani counterpart Yousuf Raza Gilani,India today said the trust deficit with its neighbour was "shrinking" but maintained that Islamabad needs to take action against terror training facilities. "I think our relationship with Pakistan is becoming a little more stable than what it was before," External Affairs Minister S M Krishna said on board the special aircraft on way to Maldives to attend the 17th SAARC summit. He said the Secretary-level talks in the last 6-8 months have created the "right kind of atmosphere" for summit level talks. Singh is scheduled to meet Gilani tomorrow. "We are optimistic for the outcome of our dialogue with Pakistan," Krishna said. He,however,quickly pointed out,"Well that doesn't mean to say that we are going to solve every problem which is outstanding. But the atmospherics is very encouraging". Talking further he said,"And then the trust deficit is shrinking down. The trust level has gone up very much". Referring to Pakistan Foreign Minister Hina Rabbani Khar's visit to India,Krishna said,"I think we are in for a new level of understanding". He said the kind of animosity that both countries shared couple of years back is no longer there. "There is an element of understanding," Krishna said. Asked about the issue of terrorism and the trial of the 26/11 case in Pakistan,Krishna said,"terror facilities have to be destroyed". Krishna added,"We would like Pakistan to realise that in order to fight terror within Pakistan and outside of Pakistan,it is necessary for them to work out a joint strategy with India in order to fight terror". Krishna said terror cannot be selectively fought. "And then as I have said ad nauseum,terror cannot be selectively fought. It has to be across the board,we will have to fight terror". Talking about China's growing interactions and investment in the SAARC region,Krishna said India has historic ties with the countries in the area. Asked if the issue of India-Afghanistan strategic agreement will come up for discussion with Pakistan,Krishna said,"It is a bilateral agreement between India and Afghanistan".