India and Pakistan have agreed to launch a landmark bus service across the ceasefire line dividing Kashmir between the nuclear rivals.
Singh [L] and Kasuri broke a deadlock on the Kashmir bus issue
The deal was announced after a meeting between the Indian and Pakistani foreign ministers in Islamabad.
The two sides have also agreed to begin discussions on reducing the risk of nuclear accidents.
Correspondents say the agreements will give a new boost to a peace process that began more than a year ago.
Pakistani Foreign Minister Khursheed Kasuri says the bus service linking the capitals of Indian and Pakistani-administered Kashmir is likely to start on 7 April.
"We have agreed between us on mutually acceptable procedures for establishing a bus service between Srinagar and Muzaffarabad," Natwar Singh said at a joint press conference in Islamabad.
The bus agreement has been welcomed by most Kashmiris although some of the separatists say it sidesteps the main issue - resolving the long-running Kashmir dispute.
The BBC's Zaffar Abbas in Islamabad says it gives millions of Kashmiris a chance to travel across the ceasefire line for the first time in more than 50 years.
Khalid Dar, 38, an electricity department employee in Pakistan-administered Kashmir, told Associated Press: "It's great. Now I will travel to the Indian portion of Kashmir to see my relatives. I never imagined the two countries could reach such a decision."
The talks had been deadlocked by a disagreement over India's insistence that passports be used as travel documents, which Pakistan says would compromise Kashmir's disputed status.
The two sides have now agreed to use entry permits in place of passports once identities of the travellers are verified.
The two sides also say they are planning another bus service between the Pakistani city of Lahore and the Indian city of Amritsar and a rail link between the provinces of Sindh and Rajasthan.
They are also discussing reopening their consulates in the cities of Karachi and Mumbai (Bombay), the ministers said.
The Kashmir bus link is likely to start on 7 April
Mr Singh said India has also agreed to consider a proposal to build a gas pipeline from Iran to India, through Pakistan.
Natwar Singh's visit is the first bilateral trip to Pakistan by an Indian foreign minister in 15 years.
He said the two sides had made a lot of progress over the past year.
"I'm convinced that cooperation between our two countries is not just a desire and an objective, it is an imperative," he said.
Previous peace attempts have stumbled over the Kashmir dispute, which has resulted in two wars between India and Pakistan.
Last month, both sides accused each other of violating a 15-month ceasefire along the Line of Control.
Pakistan also opposes Indian plans to construct a dam in the Himalayas, saying it will deprive its own territory of water for agriculture.
The issue of Pakistan's concerns over the use of Ahmedabad in India's Gujarat state - the scene of religious riots in 2002 - as a venue for matches on its upcoming cricket tour was also being discussed, as was the rescheduling of a regional forum postponed this month.