For the first time in over a year, a Pakistani diplomatic representative to India is setting up office in New Delhi.
Pakistan's new high commissioner to India, Aziz Ahmad Khan, crossed over the tightly controlled land border between the two nations Monday, en route to his posting in New Delhi.
The arrival of Mr. Khan, a former foreign ministry spokesman, marks the first permanent Pakistan representative to India in over a year.
India is expected to reciprocate later this month.
The Indians cut ties over two years ago following a terrorist bombing on their Parliament, an attack which New Delhi says was supported by the Pakistani intelligence agency. Pakistan, which denies any involvement in the bombing, responded by withdrawing its representative some months later.
The exchange of envoys is the latest step in the two countries' inch-by-inch movement toward peace, after narrowly avoiding war last year.
India and Pakistan are also negotiating to resume direct bus service, now slated to reopen in late July or early August. Other talks are planned to discuss renewing air travel between the two countries.
Prominent Pakistani political commentator Ayaz Amir said that while few doubted diplomatic ties and travel links would eventually be restored, the current atmosphere of improving relations gives the moves special meaning. "They were bound to happen, but they've taken place against the backdrop of a different feeling now in Pakistan. There is a sense now that by itself these small steps are a step towards a better relationship, and people are looking are looking upon it as significant," he said.
Tensions between India and Pakistan are focused on the mountain territory of Kashmir, claimed by both sides. The two have gone to war three times and fought several minor military engagements since their independence from Britain in 1947.
Relations began improving after India's prime minister issued an open call for negotiations on Kashmir in April.
Speaking Saturday, Pakistani Foreign Minister Khurshid Kasuri said his government is ready to begin talks on the Kashmir issue, whether in a bilateral form or with international mediators present.
Pakistani President Pervez Musharraf reportedly discussed the dispute during his recent meetings with President Bush and British Prime Minister Tony Blair.