The foreign ministers of Pakistan and India have noted "with satisfaction" the economic and political gains made by the ongoing composite dialogue and decided to carry it to third round, which will start in January next year.
At their one-day session here on Monday, Khurshid Kasuri and Natwar Singh also decided to revive the Joint Pak-India Ministerial Commission but decided to keep it on the sidelines so as not to disturb the "integrity of the composite dialogue".
The Joint Commission will meet on Tuesday morning, which will be its second meeting since its inception in 1989, during a meeting between Benazir Bhutto and Rajiv Gandhi.
Starting in January, the third round will run through July next year and then foreign ministers will reassemble to review its progress again.
The two countries also initialled the much-awaited agreement on Pre-notification of Ballistic Missile Tests and also a Memorandum of Understanding (MoU) on setting up a communication link between the Pakistani Maritime Security Agency (MSA) and the Indian Coast Guards.
Addressing separate media briefings on the meeting, foreign secretary Riaz Muhammad Khan and his Indian counterpart Shyam Saran recounted the gains made during the second phase of the dialogue and expressed the optimism that the third round will take the progress achieved so far further.
Shyam Saran said that New Delhi was satisfied with the progress made in the economic and commercial field and that his country attached more importance to Pakistani efforts of making itself the "hub of commercial activity in the region.
He said that India was looking forward to opening of more land routes between the two countries for furtherance of trade not only between them but also between South Asia and Central Asian states. He looked forward to using the transit facilities in this respect.
The Indian official said though the recent imports by Pakistan from India were only on ad hoc basis, his country hoped those will become a regular feature and increased exchange of goods between the two sides will take place.
He said India welcomed the exchange of business delegations and wanted to further liberalise the business visa. He also looked forward to hold an 'Indian Fair' at Lahore in the coming months and also allow trade across the Line of Control in Kashmir.
After a brief meeting here in the morning, the Pakistani and Indian delegations went to Nathiagali hill resort for further discussions, returning here in the afternoon.
Indian External Affairs Minister Natwar Singh is leading a 17-member delegation of Indian officials while foreign minister Kasuri heads the Pakistani side. The two delegations include their top foreign policy administrators, the foreign secretaries.
Among the gains of the second round of the composite dialogue, the two secretaries listed the opening of borders to exchange of visitors and pilgrims by regular bus services and also the forthcoming initiation of the Khokhrapar train service that is expected to start on once a week basis from December.
They said that the signing of an agreement on pre-notification of missile tests and also an MoU on setting up hotline connections between Pakistani and Indian coastal authorities, provision of diplomatic access to prisoners, talks on trade, aviation services and reopening of consular services at Karachi and Mumbai were some of the positive steps resulting from the CD.
During the afternoon session, the foreign ministers also discussed the issues of Jammu and Kashmir, Siachin, Sir Creek and also terrorism but both the foreign secretaries declined to go beyond this cryptic remark.
Shyam Saran said that though agreement has been reached on Siachin Glacier, the two sides will continue to find "ways and means for solution."
He told a questioner that India was in touch with the people of Kashmir to assess their "aspirations" and referred to the recent meetings between Indian leaders and those of All Parties Hurriyat Conference. Also his government was gauging the aspirations of people of Jammu and Kashmir living on both the sides of Line of Control.
The two sides also talked on ways to increase tourism and also exchanged experiences in agriculture and health sectors.
While Riaz Muhammad Khan described the gains made by the second round as a foundation for "future progress", he remarked that Pakistan wanted to move in all fields at much faster pace.
However, his Indian counterpart pleaded for patience on the issues that had not been budged from their original moorings, including that of Kashmir, he thought it was too early to expect spectacular results in those fields. "We have to be patient, have trust and understanding as we are dealing with a complicated issue and the composite dialogue process is only two years old", he remarked.
Answering a question, Riaz Khan confirmed that Pakistani side had also mentioned the question of reduction of Indian troops in occupied Kashmir.
Saran said despite Iranian rebuff to New Delhi for voting against it at the International Atomic Energy Agency (IAEA), the question of purchasing gas from Iran was still open.
He said Indian vote at Vienna in the IAEA's meeting had nothing to do with the proposed gas pipeline deal.
The subject, he said, was discussed at the ministerial council of the current composite dialogue between Pakistan and India and New Delhi had informed Pakistani delegates it has already appointed a consultant to examine economic feasibility of the project.
He said Pakistani side had told the meeting it is also going to acquire similar service for a study. Secondly, he said, Pakistan energy minister was schedule to visit India next month for further talks on the matter.
In the IAEA meeting last week, India had voted in favour of the proposal that Iran be reported to the Security Council for insisting to continue with its nuclear development programme that included enrichment of uranium fuel.
Angered by the vote, Iran reportedly withdrew its proposal to extend the Pak-Iran gas pipeline to India.
After his return from Nathiagali, Natwar Singh met with former foreign ministers Sahibzada Yaqoob Ali Khan and Agha Shahi and also former foreign secretaries Sheharyar Khan, Humayun Khan and Riaz Khokhar.
Among the politicians he met included Asfandyar Wali Khan, Akram Zaki, Chaudhry Nisar Ali Khan and a representative of Muttahida Qaumi Movement.