Israeli Prime Minister Ariel Sharon has held a first day of talks in India at the start of a landmark visit.
Mr Sharon paid tribute to Mahatma Gandhi
Mr Sharon, the first Israeli premier to visit India, is holding three days of meetings in which increased military co-operation is high on the agenda.
He and his Indian counterpart, Atal Behari Vajpayee, discussed defence, security and trade deals, and vowed to fight terrorism together.
Earlier, hundreds of people demonstrated against Mr Sharon's visit in the capital, Delhi, and elsewhere.
Indian Muslims and left-wing activists are angry at Israel's policy towards the Palestinians.
Alongside the prime ministers' talks, senior military officials from both countries also conferred.
Correspondents say they are finalising details of a billion-dollar contract for India to buy Israel's Phalcon early-warning radar systems.
India's neighbour, Pakistan, has reacted with concern to Mr Sharon's visit, warning it could destabilise the region.
Ariel Sharon's trip is being conducted under very tight security.
Hundreds of supporters of India's various communist parties rallied in the capital, Delhi, denouncing the visit.
In the commercial capital, Bombay (Mumbai), police were reported to have arrested more than 100 Muslims.
"He is a terrorist, a war criminal," Muslim scholar Maulana Mansoor Ali told protesters, Reuters news agency reports.
Mr Sharon himself spoke positively of the importance of his hosts.
"We regard India to be one of the most important countries in
the world," he said in Delhi.
Mr Vajpayee said he was sure Mr Sharon's visit would bring the two states closer together.
At a dinner later, he said terrorism was a menace that required an international response.
"Bilaterally and on the international plane, we are
contributing to the global fight against terrorism."
Mr Sharon was accorded a ceremonial welcome at Rashtrapati Bhavan, the 340-room British-built palace of the Indian president.
He began official business by laying a wreath at the memorial to the leader of India's independence movement, Mahatma Gandhi.
The visit is dividing opinion in India
Opponents of Mr Sharon's hard-line policy towards the Palestinians say his record made him unfit to visit a centre dedicated to a champion of non-violence.
Mahatma Gandhi himself was opposed to the creation of the state of Israel.
"Why should [Jews] not, like other peoples of the earth, make that country their home where they are born and where they earn their livelihood?" he argued in 1938.
The BBC's Adam Mynott in Delhi says Mr Sharon's Indian journey marks another step forward in relations between the two countries since they were first established 11 years ago.
The presence of so many senior executives from defence industries in Mr Sharon's entourage confirms the growing importance of military co-operation between the two countries, our correspondent says.
The Israeli PM has called off a visit to the Taj Mahal
Last month the United States lifted its objections to Israel selling India its $1bn Phalcon early warning airborne radar system.
Details are still being worked on and it is not expected that any contracts will be signed during Mr Sharon's visit.
Some analysts are talking of a developing three-way axis between Washington, Delhi and Jerusalem.