The two-day talks in Islamabad will review the step-by-step measures to improve relations between the South Asian rivals, which were launched amid optimism in January but have now largely stalled.

The meetings were being held "to clear the air, to gauge movement, to invest the process with fresh energy and to prepare for the future," Pakistan Foreign Ministry spokesman Masood Khan told AFP.

India's top foreign ministry official Shyam Saran and his Pakistani counterpart Riaz Khokhar would discuss the Himalayan territory of Kashmir, which is divided between the two and claimed in full by both, officials said.

They would also review so-called nuclear confidence-building measures, as well as prepare a schedule of future meetings.

India and Pakistan conducted tit-for-tat nuclear tests in May 1998 and came close to war in 2002 over Kashmir. They have already fought three wars since independence from Britain in 1947.

However, analysts held out little hope that the South Asian rivals would make any significant headway in the current talks.

"I see an imbalance in the peace process because so far the solution of contentious issues is moving nowhere, while confidence-building is proceeding," Pakistani analyst Hasan Askari told AFP.

Pakistan and India have recently restored road, rail and air links and delegations of politicians, lawyers, actors and peace activists from each side have started making visits across the border.

A proposed bus service between Srinagar, the summer capital of Indian-held Kashmir, and Muzaffarabad in the Pakistani-controlled zone would also be reviewed at the talks, having hit snags in previous rounds.

But the central issues between Pakistan and India remain unresolved.

At talks earlier December they failed to reach an expected deal on giving advance notice of nuclear tests, and could not finalise arrangements for a nuclear hotline, despite agreeing on the link in principle last June.

"Kashmir is a very complex issue, but progress could have been made on other contentious issues," Askari added.

Pakistan President Pervez Musharraf said on Thursday he would show flexibility over Kashmir if India did the same.

In October he set out suggestions for resolving the dispute, including demilitarising Kashmir and either placing it under an United Nations mandate, putting it under joint control or giving it independence.

However, Indian Prime Minister Manmohan Singh on Tuesday said peace talks would not include any redrawing of boundaries or another partition of Kashmir.

Riffat Hussain, a professor at the strategic studies department of Islamabad's Quaid-e-Azam University, said India needed to allow the peace process to move forward.

"There is very little flexibility on Indian side," Hussain told AFP.

"I do not say that the talks are bogged down... but they (India) hold the trump cards and will have to give concessions," he said.

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