During their 40-minute meeting, the two leaders assessed the progress made in the peace process and the Composite Dialogue, initiated four years ago.
Various confidence-building measures, including the cross-Line of Control initiatives, are understood to have specifically come up during the meeting.
India is keen to take the peace process further through more confidence building measures.
Mukherjee, who is in Islamabad on a two-day visit to review the fourth round of the Composite Dialogue between the two countries, called on President Pervez Musharraf at the Aiwan-e-Sadr or presidency earlier today.
Image: External Affairs Minister Pranab Mukherjee with Pakistan Prime Minister Yousuf Raza Gilani in Islamabad on Wednesday.
Photograph: Jay Mandal/On Assignment