Prime Minister Manmohan Singh and his Pakistani counterpart Yousuf Raza Gilani will hold a meeting in Thimphu on Thursday during which the Indian side is expected to flag its unhappiness over the lack of "credible" action by Islamabad to punish perpetrators of 26/11 and end cross-border terrorism.
Singh and Gilani had last met for substantive discussions in Sharm-el-Sheikh in July last year. They had two brief encounters earlier this month in Washington where both the Prime Ministers were to attend the Nuclear Security Summit.
Indian government sources said Singh and Gilani would meet on Thursday evening, ending speculation about whether the interaction would take place or not.
During the meeting, Singh is expected to focus on India's "core" concern of cross-border terrorism and highlight unhappiness that Pakistan has not done enough on this front.
Singh is expected to seek an update on the investigations and trial in the Mumbai attacks case in Pakistan.
He is likely to point out that the threat of terrorism emanating from Pakistan continues to loom and Pakistan had not taken any concrete steps to eradicate this to create conditions for resumption of substantive dialogue between the two countries.
Pakistan has arrested seven of those accused in the Mumbai terror strikes but India maintains that it is not enough as the mastermind of the attacks Jamaat-ud-Dawa chief Hafiz Saeed was still free and engaging publicly in vitriolic tirade against India.
Singh had made it clear a few days back that "credible" and "effective" action by Pakistan against all those behind the Mumbai attacks was the "minimum" requirement for resumption of dialogue on all issues.
Singh underlined that several of the "conspirators", including Saeed, were still roaming about freely and rejected Pakistan's contention that there was not enough evidence to act against him.
He had said that proof about his involvement in 26/11, even that gathered by American agencies, was already in public domain and there was no need to give any more to Pakistan.
India has put the composite dialogue on hold since the Mumbai attacks and refused to resume it till Pakistan punishes all those behind the carnage.
During the Singh-Gilani meeting, the Pakistani side is expected to raise the issue of water sharing.
Pakistan has been alleging that India was violating the Indus Water Treaty of 1960 by building a power project on Kishanganga River in Jammu and Kashmir, a contention rejected by India.
At India's initiative, the two countries held foreign secretary-level talks on February 25 to discuss the issue of cross-border terrorism hurting India. However, India has ruled out resumption of composite dialogue till it is satisfied with action Pakistan takes against perpetrators of Mumbai terror attacks.
Singh and Gilani had two brief interactions in Washington on the sidelines of the two-day Nuclear Security Summit on April 12 and 13. They shook hands and exchanged pleasantries.
Singh later said he had congratulated Gilani for the constitutional amendments in Pakistan which made the prime minister more powerful.
Pakistan Foreign Office spokesman Abdul Basit said earlier that both countries have realised that there has to be a meaningful and constructive dialogue.
"If they (PM, Gilani) meet, our Prime Minister's effort will be to start such an engagement so that all the issues of terrorism and others are solved," he said.
Basit had said the proposed meeting between the two leaders was part of a roadmap given to India by Pakistan, first in New York and then during the foreign secretary-level talks in New Delhi.