Owen Bennett-Jones: Any improvement in relations depends on Kashmir

A spokesman for the talks said that the session of negotiations had been candid and frank and that the two sides reiterated their respective positions on Kashmir.

The spokesman said that talks on Kashmir would continue at some time in the future.

The Pakistani Foreign Secretary, Shamshad Ahmad, said it was always unrealistic to expect much progress on so complicated an issue. But he also said that progress on Kashmir will be necessary if the two countries are to be able to move forward in other areas.

Shamshad Ahmad: "Whole world watching"

"The whole world is watching the situation, and they believe that Kashmir today is a nuclear flashpoint, and unless both India and Pakistan can do something to reach an agreement on this issue to resolve this problem, in accordance with the wishes of the Kashmiri people, it will be very difficult to normalise the situation in this region," Mr Ahmad said.

No deadlock

Heart of the dispute: Kashmir

Despite the lack or progress on Kashmir, the Indian Foreign Secretary, K Ragunath, said that there was no question of the two sides having reached a total deadlock.

"We have agreed that the discussion on this subject of Jammu and Kashmir will be a part of a composite dialogue process," Mr Raganuth said.

Talks spokesman Tariq Altaf: "Frank and candid" discussion

Officials say that the two sides are to conduct further informal talks and then issue a joint statement at the end of the negotiations on Sunday.

Long-running dispute

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

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.

Relations between the two countries sank to a new low following nuclear weapons tests by both sides earlier this year.

India and Pakistan are both anxious to see the lifting of economic sanctions imposed in the wake of the nuclear tests and have moved towards agreeing to the Comprehensive Test Ban Treaty.