Islamabad: India and Pakistan on Tuesday expressed satisfaction over the progress of peace talks after discussing issues ranging from Jammu and Kashmir to terrorism in their first major bilateral engagement since a civilian government took office in March. The two countries said in a joint statement that their foreign secretaries had reviewed the fourth round of the composite dialogue that took place in 2007 and decided to carry forward the four-year-old peace process.

"The foreign secretaries expressed satisfaction at the progress made so far and exchanged views on carrying forward the composite dialogue," the press release said at the end of delegation-level talks between Foreign Secretaries Shivshankar Menon of India and Salman Bashir of Pakistan. "The talks were held in a friendly and constructive atmosphere," the statement said.

The South Asian neighbours have been carrying on the composite dialogue since the peace process started in January 2004. Menon and Bashir met at the foreign office on Tuesday morning. The two senior officials met for about an hour ahead of the delegation-level talks. The foreign secretaries took an overview of the progress in discussions on eight issues included in the composite dialogue: peace and security, including confidence building measures (CBMs); Jammu and Kashmir; Siachen; Sir Creek; Wullar barrage; terrorism and drug trafficking; economic and commercial cooperation; and promotion of friendly exchanges.

India is believed to have conveyed concerns over cross-border terrorism, the recent attempts by militants to sneak into Jammu and Kashmir from Pakistan, and firing along the Line of Control (LoC) that divides the region between the two countries. One Indian soldier was killed on Monday in the alleged Pakistan firing. Indian officials underlined the need for "concrete action" by Pakistan to end what they said was cross-border terrorism and infiltration. India also urged Pakistan to honour its pledge not to allow anti-India terrorist groups to operate on its soil.

The Pakistani side argued that their country was as much a victim of terrorism as India was and called for more cooperation in this area, said an Indian official who did not wish to be named. India also pressed for the launch of more cross-LoC bus services and an early start of a truck service to connect Srinagar and Muzaffarabad - the two main cities in the two parts of Kashmir.

The argument is that such confidence building measures will increase the flow of trade and travel between the two halves of Kashmir, one controlled by India and the other by Pakistan. The launch of the Jammu-Sialkot and Kargil-Skardu bus services are expected to be announced at the end of the review of the composite dialogue on Wednesday.

The two sides also explored the possibility of increasing the frequency of the Srinagar-Muzaffarabad and the Poonch-Rawalkot bus services by making them a weekly affair. Raising the issue of Kashmir, Pakistan stressed the need to move from conflict management to conflict resolution, an Indian source said.

New Delhi conveyed its readiness to address all issues with Pakistan, including Jammu and Kashmir, and said that more cross-border CBMs will make the "border irrelevant" and bridge the trust deficit between the two countries. The fourth round of composite dialogue ended in 2007 but the review at the level of foreign secretary and foreign ministers could not take place due to political turmoil in Pakistan.