JOIN USThe two countries said they were going into the talks with "optimism" and an "open mind" but Pakistan's new Foreign Minister Hina Rabbani Khar said Kashmir was the core issue between the two countries.
Khar, who took charge of the ministry only Thursday, asked: "If Kashmir is not the core issue, what is the core issue?"
Betraying the Pakistani position at the talks in which she did not participate, she underlined that the two countries "have to move away from their stated position ... to a realistic position".
It was not clear if Foreign Secretaries Nirupama Rao of India and Salman Bashir of Pakistan discussed Kashmir, which the two countries claim and which is divided between them.
Neither side gave any official briefing on what transpired at the meeting.
Arrving here Thursday morning for the two-day discussions, Rao said New Delhi was "approaching the talks with an open and constructive mind".
"We have a clear agenda in front of us," she said.The two top officials reportedly discussed issues related to peace and security and confidence-building measures across the Line of Control that divides the two Kashmirs.
The second and third round of talks on Jammu and Kashmir and promotion of friendly exchanges will take place here Friday.
The Thursday-Friday meeting will also prepare the ground for next month's talks between the two foreign ministers.
Bashir said Pakistan was approaching the discussions with a "great sense of confidence, optimism and determination".
"We wish to engage with you in not only walking the trajectory but also exploring new avenues further," he said.
India is concerned over the slow pace of trial of those who masterminded the 2008 Mumbai terror attack blamed on Pakistani terrorists. New Delhi is also concerned over revelations that sections of the Pakistani spy agency ISI may have been linked to the Mumbai massacre.
Pakistan does not want India to skirt the row over Kashmir.
The talks took place as US President Barack Obama announced an initial withdrawal of 10,000 US troops from Afghanistan, where India and Pakistan have emerged as rivals competing for influence.
Before leaving for home Saturday, Rao will call on Pakistani Prime Minister Yousuf Raza Gilani.
This is the first high-level engagement between the two neighbours since Indian Prime Minister Manmohan Singh hosted Gilani at the World Cup cricket semifinal in Mohali March 30.
In February, the two countries decided to resume talks on all bilateral issues, reviving the dialogue process frozen after the Mumbai attack. Since then, the defence, interior and commerce secretaries have met.
Rao said on arrival that the discussions would include "peace and security, including confidence building measures, Jammu and Kashmir and promotion of friendly exchanges".
"I bring with me the best wishes of the people and the government of India for the people and government of Pakistan. We wish to see a stable, peaceful and prosperous Pakistan," she said.
In New Delhi, the Bharatiya Janata Party (BJP) warned the government against making any compromise on Kashmir.
BJP leader L.K. Advani threatend to launch a mass demonstration if the government went in for a settlement of the Kashmir issue with Pakistan.