With much of the spadework on secondary issues already done, Indian Foreign Minister Natwar Singh and his Pakistani counterpart Khurshid Mahmud Kasuri will sit down in New Delhi on Sunday to discuss the issue at the core of the decades-old dispute -- the former princely state of Kashmir.

The process was set in motion in April last year by then prime minister Atal Behari Vajpayee when he extended a "hand of friendship" to Pakistan during a visit to the Indian zone of Kashmir.

A few months earlier the two neighbours almost came to war following a bloody attack on India's parliament by gunmen New Delhi claimed were sponsored by Islamabad.

Pakistan denied the charges but the issue of what India terms "cross border terrorism" -- an insurgency in Indian Kashmir by Islamic militants which has claimed at least 40,000 lives in the past 15 years -- continues to rankle and will be Singh's main focus at the talks.

India says the rebels are sponsored by Pakistan but for Islamabad the bloodletting is a result of an indigenous movement started by Kashmiris themselves.

Pakistan insists Kashmir, the subject of two of the three wars it has fought with India since 1947, will remain the "core" issue of a composite dialogue which was decided between the leaders of the two countries on the sidelines of a regional summit in January.

Both countries administer sectors of the picturesque Himalayan territory, with a Line of Control (LoC) -- a de facto border -- separating their armies. Both claim a historical right to the entire state.

Indian officials privately acknowledge they may be willing to accept a demarcation of the LoC as an international border, but Pakistan vehemently opposes it, calling instead for a plebiscite in Kashmir in accordance with long-standing UN resolutions.

The refusal of the two sides to blink on their stated positions saw the collapse of a summit in July 2001 between Vajpayee and Pakistani President Pervez Musharraf.

Both sides are today adopting a more cautious approach, allowing more contact between their peoples in the hope the process will build its own momentum.

When Indian cricket fans crossed the border for a Test series in Pakistan last March/April a surge of goodwill was generated that has extended to cultural, medical and business exchanges, among others.

The key question is whether the politicians meeting here Sunday and Monday can bolster that momentum and move forward on Kashmir.

Recent statements from India accusing Pakistan of reneging on promises to halt "cross border terrorism" indicate it won't be a smooth ride.

But analysts say the rhetoric is to be expected and point out that leaders from both sides have been at pains to reaffirm commitment to the peace process.

"One must not take these things too seriously because diplomats take this path and whenever talks take place they tend to up the ante a little," said Gurpreet Mahajan, a political scientist at India's prestigious Jawaharlal Nehru University.

"The issue of cross-border terrorism has always been there but at the same time there has also been a continuity in bilateral exchanges ... Both parties realise that in their own interests and because of international pressures they will have to go ahead," Mahajan told AFP.

More ominously, secretary-level talks between India and Pakistan failed in August to resolve disputes such as a troop pullback from a strategic glacier, water-sharing and demarcation of a boundary between Pakistan's Sind province and India's Gujarat state.

Ashwani Kumar Ray of Jawaharlal Nehru University's department of international studies, predicted little progress because of continued intransigence on both sides.

"The two positions are well known to each other. Pakistan cannot allow any concession on the Kashmir dispute and the Indian position, which has veered around to legitimising the Line of Control -- something which Islamabad simply cannot allow to happen."

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