India and Pakistan's decision to launch a bus service across the ceasefire line dividing the disputed region of Kashmir has been largely welcomed.
The bus service between Srinagar and Muzaffarabad begins in April
Britain commended India and Pakistan for their "spirit of cooperation" in achieving the breakthrough.
Media reports in both countries describe the deal as a major step in the ongoing peace process.
The bus service was one of several announcements made after a meeting of the two foreign ministers on Wednesday.
"I warmly applaud the efforts of both India and Pakistan to make this happen," UK Foreign Secretary Jack Straw said in a statement.
Kashmiri politicians on both sides of the Line of Control which divides the region welcomed the move.
"By agreeing to start the bus service between Srinagar and Muzaffarabad, India and Pakistan have made a beginning towards making Jammu and Kashmir a bridge between them," Mehbooba Mufti, the president of the ruling People's Democratic Party in Indian-administered Kashmir, said.
Opposition leader Omar Abdullah described it as "a sign of the flexible attitude of Delhi to find a lasting solution of the Kashmir issue".
The leader of Pakistan-administered Kashmir, Sardar Sikandar Hayat welcomed the move describing it as a "breakthrough in resolving the core issue of Kashmir between India and Pakistan".
But India's main opposition Bharatiya Janata Party criticised India's decision to drop a demand for passports to be used as entry documents.
"While we welcome people-to-people contact, national interests and security concerns cannot be ignored.
"Allowing people to travel without passport, which is the authentic document of citizenship, will not be in the interests of national security," BJP vice-president Mukhtar Abbas Naqvi told the Press Trust of India.
Militants fighting Indian rule in Kashmir were more vocal in their opposition.
Mufti Abdur Rauf, a spokesman for the outlawed militant Jaish-e-Mohammed group, said: "This will weaken the idea of Kashmir uniting with Pakistan. This is a conspiracy by India to weaken jihad (holy war)."
But newspapers on both sides of the border hailed the decision as a dramatic breakthrough.
Kasuri [L] and Singh broke a deadlock on the Kashmir bus issue
It is "a move that could change the dynamics between Kashmiris living on either side of the LOC," wrote the Times of India adding that India and Pakistan relations had "just got itself a new pair of wheels".
Both the Pioneer and Asian Age newspaper described the deal as dramatic, with the former saying it signalled "a departure from firmly held positions of the past".
The Asian Age said: "In a single day of talks [the two sides] achieved agreement on a gas pipeline that will change the eco-politics of the region; a bus route that was part of Kashmiri fantasy; CBMs [confidence building measures] on nuclear missiles that should be common sense but were uncommonly difficult to put through."
Pakistan's Dawn daily described the bus agreement as "the mother of all CBMs".
Breaking the ice
The News newspaper said the ice between the two sides was broken at a one-on-one exchange by the two foreign ministers over dinner hosted by the Indian high commissioner.
"A lot of issues were agreed upon in this meeting together with input from the back channel diplomacy that also helped push forward matters. The forces of peace will surely be strengthened," it said.
A second bus service linking the Pakistani city of Lahore with Amritsar in India was also announced as well as a rail link between Rajasthan state and Pakistan's Sindh province.
Both sides agreed to begin talks on reducing the risk of nuclear accidents and also said they planned to reopen their respective consulates in Karachi and Mumbai (Bombay).