Having remained vvedded to Kashmir as an "armed self-determination conflict" for över fîve decades, Pakistan under General Pervez Musharraf seems to be changing course in favor of a diplomatic settlement that vvould be acceptable to India, Pakistan and the Kashmiris. This changing Pakistani outlook on Kashmir is clearly reflected in President Musharrafs advocacy of a four point proposal vvhich seeks a settlement of the Kashmir dispute outside the framevvork of UN resolutions. This article describes key elements of Islamabad's nevv thinking on Kashmir, analyses some of the domestic, regional and global factors underpinning this change and concludes by noting some of the domestic challenges faced by Musharraf in efîfectively pursuing his out of the box thinking on Kashmir.