Owen Bennet-Jones: "Negotiations are again under way"

After an opening day of meetings which was described as "frank, warm and cordial" by the talks spokesman, the two countries are preparing to discuss the status of Jammu and Kashmir, which both countries lay claim to.

Islamabad says that Kashmir should have become part of Pakistan during partition 50 years ago.

Heart of the dispute: Kashmir

But India argues that Kashmir is an integral part of its territory and has accused Pakistan of sponsoring a separatist campaign in Indian Kashmir.

Pakistan insists it is only providing moral support for the separatists.

During Friday's talks Pakistan's Prime Minister Nawaz Sharif issued a statement saying that a "just" settlement of the dispute was vital for relations between the two countries, which sank to a new low following nuclear weapons tests by both sides earlier this year.

Owen Bennett-Jones in Islamabad: "No indication either side is prepared to move over Kashmir"

The BBC's correspondent at the talks, Owen Bennett-Jones, says that there has yet to be an indication that either side is prepared to shift from its position.

The first day of talks broke up without public comment from the two countries other than to say that they were committed to dialogue.

Confidence-building measures, essential for laying the groundwork for relations following the nuclear tests, dominated the sessions between the foreign ministers in Islamabad.

Borderline relations: Two sides meet at the frontier

Neither side would confirm whether the two countries' nuclear arms status had been discussed, but Mr Sharif said that the two countries should seek a nuclear and conventional stabilisation regime in order to reduce tension.

Tariq Altaf, spokesman for the talks, said that the first day had been taken up by both sides attempting to identify areas of agreement.

He added that the two sides, led by Indian Foreign Secretary K Ragunath and his Pakistani counterpart Shamshad Ahmad, had explored "the full range of issues of peace and security, including confidence-building measures".

Talks spokesman Tariq Altaf: "The talks were cordial"

Earlier, Mr Sharif said he was releasing all Indian fishermen and boats currently in Pakistan's custody as a gesture of good will.

The talks come after India's Prime Minister Atal Behari Vajpayee met Mr Sharif at the United Nations General Assembly last month.