More confidence-building measures were to be announced when the talks wind up later Monday, such as the restoration of transport links and people-to-people contacts, and both sides were to agree to continue the peace process which began last year, the officials said.

But Pakistan Foreign Minister Khurshid Mahmud Kasuri and his Indian counterpart Natwar Singh, who Sunday held a first round described by officials as "friendly", have agreed that key differences should be revisited at a later stage, according to unnamed officials widely quoted in the Indian media.

These include the Islamic insurgency in the Indian zone of divided Kashmir which has left at least 40,000 people dead in the past 15 years as well as the core issue -- control of Kashmir.

India and Pakistan each hold part of picturesque Kashmir and both claim it in full. They have fought two of their three wars over the Himalayan region.

Pakistan wants Kashmiris to decide their future through a UN-sponsored plebiscite while India says the matter should be decided bilaterally between New Delhi and Islamabad.

According to the officials, Kasuri and Singh would issue a joint statement later Monday agreeing that a fresh round of the "composite dialogue" process -- a flurry of official-level meetings focusing on eight key points -- should be held.

They were also expected to announce agreement in principle that a bus service linking the two rival zones of Kashmir be started and that the railway line between India's Rajasthan state and Sind province in Pakistan, closed since a 1965 war, be reopened.

They would give the nod as well to a continuation of official-level talks on nuclear confidence-building measures, narcotics control and improving trade ties, as well as dialogue between their respective coast guards.

A joint statement at the end of Sunday's meeting, the first official ministerial-level contact between the nuclear-armed rivals in three years, said the talks had been "friendly, cordial, affable and constructive."

Both sides separately said they were committed to continuing the composite dialogue.

However, they disagreed on the issue of Islamic militancy in Kashmir, with India accusing Pakistan of not living up to a January promise to rein in the rebels and Pakistan denying it was sponsoring the violence.

Indian Prime Minister Manmohan Singh on Saturday warned that the dialogue between the rival states would make real progress, "only if terrorism is under control."

Analysts said Kasuri and his Indian counterpart had essentially been engaged this weekend in a "holding operation" ahead of a first contact between Pakistani President Pervez Musharraf and Premier Singh on the sidelines of the UN General Assembly in New York later this month.

Musharraf and Singh's predecessor, Atal Behari Vajpayee, met at a regional summit in Islamabad last January and gave the go-ahead for the start of the composite dialogue, which unfolded between March and August.

Vajpayee had set the ball rolling in April last year when he extended a "hand of friendship" to Pakistan.

The neighbours at the time were in the midst of a military standoff in Kashmir after gunmen India claimed were sponsored by Pakistan attacked the parliament in New Delhi. Islamabad hotly denied the charge.

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