Kashmir issue blocks summit deal

President Musharraf (r) has now returned to Islamabad

Pakistan's insistence on focusing on the Kashmir issue led to the two sides failing to reach agreement at the Agra summit, Indian Foreign Minister Jaswant Singh has said.

The destination of a joint agreement has not been reached

Indian spokeswoman

Pakistan's President, Pervez Musharraf, returned to Islamabad late on Monday night after three days of talks failed to produce a joint statement.

The two countries have fought two wars over Kashmir and the issue threatened to become a nuclear flashpoint in a conflict in 1999.

They are believed to have failed to agree on the wording of a final document that would reflect their divergent positions on Kashmir.

The Indian foreign minister would not say how close they were to an agreement, merely saying: "Complex negotiations and discussions hang by a thread."

Deadlocked: Musharraf and Vajpayee

But Mr Singh sought to put a positive gloss on the summit saying he was "disappointed but not disheartened".

Correspondents say the enthusiasm and goodwill, which marked the opening of the meeting, were apparently replaced by uncertainty after the opposing views of the two sides received a public hearing.

Kashmir remains at the heart of these differences. India accuses Pakistan of supporting armed militants in the region - Mr Singh refers to the issue as "cross-border terrorism" - but Islamabad denies the accusation.

The last hours of the summit, held in the Indian city of Agra, saw frantic efforts from both sides to reach some form of agreement, and even reports of a draft joint statement being drawn up.

According to Pakistan, the statement was scuppered when India requested changes to the document, and neither side could agree a revised form of words.

Conflict in Kashmir has intensified

In a brief statement, Indian spokeswoman Nirupama Rao said: "I'm disappointed to inform you that although the commencement of a process has taken place... the destination of a joint agreement has not been reached."

However some positive signs did emerge from the meeting, including an agreement that further, regular high-level meetings between the two countries would take place in the near future.

Prime Minister Atal Behari Vajpayee has also agreed to visit the Pakistani capital Islamabad in September or October.

But the BBC's Adam Mynott says these are modest achievements compared to the high hopes for a breakthrough in relations before the summit.

Speaking to the BBC, a leading Indian political journalist warned that the lack of a breakthrough could lead to an escalation of the violence in Kashmir.

"Somehow, nobody expected any failure," said Seema Mustafa. "[The meeting] seemed to indicate that they were moving to a certain degree of peace, but a hard-line view seems to have prevailed," she added.

Violence has flared up in Kashmir since the talks opened on Saturday, with reports of dozens of people killed and injured in heavy fighting between Indian soldiers and Islamic militants.