Prime Minister Dr Manmohan Singh and Pakistan President General Pervez Musharraf held a two-hour meeting at Hyderabad House in New Delhi on Sunday, taking the composite dialogue process between the two countries a few steps forward.
Dr Singh and General Musharraf first discussed all issues between the two countries during a delegation-level talks that lasted for over an hour, which were followed by a restricted-level meeting, in which the two leaders were joined by their foreign ministers, K Natwar Singh and Khurshid Mehmood Kasuri.
After the 45-minute restricted-level talks, General Musharraf and Dr Singh held a one-on-one meeting.
The two countries decided to implement another confidence-building measure -- opening the rail link between Munnabao in Rajasthan and Khokhrapar in Sind near Karachi in December.
The rail link will benefit thousands of families, known as Mohajirs, living near Karachi, who had migrated from India, mainly from Rajasthan, Uttar Pradesh, Bihar, Gujarat and Delhi during Partition. The general is a Mohajir from Delhi.
Currently, Mohajirs face many logistical problems to visit India. They have to obtain a visa from Islamabad and then travel to Lahore to make a trip to India.
Experts believe this will be a significant diplomatic shift in the India-Pakistan peace process.
There is also a proposal to extend the Munnabao-Khokhrapur train service up to Karachi.
The two sides also decided to increase the frequency of the Srinagar-Muzaffarabad bus service, official sources said.
The talks were wide-ranging and held in a 'very warm atmosphere', Dr Sanjaya Baru, the prime minister's media adviser, said.
A ministry of external affairs official told rediff.com that the two countries also agreed to permit the plying of trucks across the Line of Control in Kashmir. This will help Kashmiri apple growers in finding new markets in areas around Rawalpindi, thus boosting Kashmir's economy.
It will also help Indian consumer products find markets in Pakistan-occupied Kashmir.
India and Pakistan also decided to set up a joint committee to resolve the dispute over the Siachin glacier and a Joint Business Council.
Before the talks, Dr Singh and General Musharraf watched the final one-day game between India and Pakistan at the Ferozeshah Kotla stadium for over an hour.
Additional reportage: PTI
Musharraf visit: Complete coverage