Inching forward on pulling out of troops from Siachen, India and Pakistan on Tuesday decided to reach a "common understanding" on the issue by January and agreed to finalise modalities for setting up meeting points for divided families across the Line of Control in Jammu and Kashmir.
Resolving to carry forward the peace process and maintain its momentum, the two countries affirmed that terrorism would not be allowed to impede it.
They maintained that possible options for a peaceful, negotiated settlement of the Jammu and Kashmir issue should be explored in a "sincere, purposeful and forward looking manner," a joint statement issued after two-day of talks between External Affairs Minister K Natwar Singh and his Pakistani counterpart Khurshid M Kasuri in Islamabad said.
The two countries revived the Joint Commission after a gap of 16 years and hoped that it would contribute significantly in enhancing economic ties.
Expressing satisfaction over smooth operation of the Srinagar-Muzaffarabad bus service, the statement said experts from the two sides would meet for launching truck service between the two points and a bus link between Punch and Rawalakot in PoK expeditiously.
It was agreed that expert level meeting would be held by the year end to finalise modalities for the meeting points of the divided families across the LoC.
Singh, who called on President Pervez Musharraf, said he conveyed greetings from President A P J Abdul Kalam and Prime Minister Manmohan Singh.
"We both agreed that Indo-Pak relations had made significant progress since the current process began on January 6, 2004," he said.
At a joint press conference with Singh, the Pakistani minister said "concrete ideas" on Siachen have been exchanged and the two sides will continue discussions for reaching a common understanding.
Singh said India had presented draft proposals to the Pakistani side on visa liberalisation, consular access and on enabling increasing number of pilgrims from both countries to religious shrines on both sides.
Before leaving for Karachi, Singh also called on Prime Minister Shaukat Aziz and exchanged views with him on all aspects of bilateral relationship.
Setting at rest apprehensions about the fate of the 7.4 billion dollar Iran-Pakistan-India gas pipeline in the wake of New Delhi supporting the International Atomic Energy Agency resolution against Iran's controversial nuclear programme, the two sides affirmed their commitment to it, saying it would contribute significantly to the prosperity and development of the two countries.
On Siachen, the statement said that the two sides exchanged ideas on the issue and agreed to continue their discussions so as to arrive at a common understanding before commencement of the next round of the Composite Dialogue in January.
About media speculation of a possible breakthough on Siachen, Kasuri said "it stands to reason that if we have already reached an agreement, we would have reflected that in the joint statement. It would be counter productive if I were to go into the details. Suffice to say that there was a reasonable degree of understanding of each other's point of view."
Without prejudice to each other's position, they agreed to undertake a joint survey of Sir Creek in the marshy land of Rann of Kutch off Gujarat coast and consider options for the delimitation of the maritime boundary. This will commence before the year end and its report will be considered in the next round of composite dialogue.
Kasuri said this would enable the two countries to work for the resolution of the Sir Creek issue in a concrete manner.
It was agreed that a meeting of experts would be held in Islamabad on October 25-26 to start the Nankana Sahib-Amritsar bus service at an early date.
A technical level meeting would be held before the end of this year to discuss arrangements for operationalising the Rawalakot-Poonch bus link as early as possible.
Welcoming the release of prisoners and fishermen by India and Pakistan, the two ministers endorsed the decisions of their Home Secretaries including immediate notification of arrests by either side.
It was decided that the next meeting of the Joint Commission will be preceded by technical level working groups on agriculture, health, science and technology, information, education, IT and telecommunication, environment and tourism.
New proposals for a cultural exchange programme were submitted by India and the two sides agreed to pursue them under the composite dialogue framework.
"The two sides reaffirmed their commitment to maintain the integrity of the composite dialogue."
Highlighting the need for having a "mature outlook to be able to manage our disputes while trying to resolve them," Kasuri said both sides were engaged in a process of conflict management and conflict resolution.
Responding to a question that India was not seriously addressing the Kashmir issue, Singh shot back saying, "I would not enter into polemics with you. I just want to say that positions of both the countries are known with regard to Jammu and Kashmir.... What is important is the atmosphere in which the talks are being held."
The ministers welcomed the agreements reached on Monday on pre-notification of flight testing of ballistic missiles and establishment of a communication link between the Indian Coast Guards and Pakistan Maritime Security Agency.
During their 40-minute meeting at the Army House in Rawalpindi, Musharraf told Singh that he was looking forward to the visit of Prime Minister Manmohan Singh to Pakistan and a warm welcome awaits him.
Kasuri accepted an invitation by Singh to visit India, the dates for which would be finalised through diplomatic channels.