Chinese Premier Wen Jiabao, left, shakes hands with Indian FM Natwar Singh, upon Wen's arrival, in New Delhi

India and China have signed an agreement aimed at resolving a border dispute that has dragged on for more than four decades. The accord was reached at the end of a four-day visit by Chinese Premier Wen Jiabao.

India and China say they have agreed on the "guiding principles" to help eventually resolve their long-running border dispute.

Few details of the agreement were made available, but local media reported that officials have agreed on an 11-point plan to address the issue.

Just before his meeting with Indian Prime Minister Manmohan Singh, visiting Chinese Prime Minister Wen Jiabao said he was confident the agreement signaled a new era in relations between the two powers. He said that India and China are going to put in place a bridge of friendship linking the two countries - a bridge that will lead both to the future.

India and China fought a brief war in 1962 over Himalayan territory they both claim.

India charges that since the 1950s, China has illegally occupied 38-thousand square kilometers of territory in Kashmir that should belong to India. China meanwhile insists that a 90-thousand square kilometer region in the Indian state of Arunachal Pradesh belongs to China.

Analysts say trade interests have forced both nations to look for ways past the territorial impasse.

The two countries also agreed to boost trade, cultural and educational ties, and cooperation in areas such as civil aviation.

D.S. Rajan, an analyst with the independent think-tank, the Observer Research Foundation, says Mr. Wen's visit demonstrates that each nation recognizes the other as an economic powerhouse.

"China also has seen India's economic growth and India's role in the region, and it really wants to balance its relations," he said. "It wants to create a very stable atmosphere in this region by coming closer to India."

India and China are the world's two most populous nations, each home to more than a billion people. During a visit to the India's high-technology capital, Bangalore, Mr. Wen said if the two sides can get past their differences, they could pool their resources and technology to lead what he called an "Asian century."