Many analysts remain optimistic about the peace process between India and Pakistan, although the latest round of talks made little substantial progress in resolving their disputes. The foreign ministers of India and Pakistan agreed to a new round of negotiations at their recent meeting in the Indian capital. At the end of two days of talks, the Indian and Pakistani foreign ministers aired their deep differences before television cameras.

India's Natwar Singh said New Delhi is unhappy with continuing infiltration of Islamic militants from Pakistani territory into Indian Kashmir. Pakistan's Khurshid Kasuri urged a quicker resolution to the dispute over the divided region.

Many analysts in New Delhi did not see the blunt sparring as a setback, but a sign of progress.

The diplomatic correspondent of the national daily Hindu, Amit Baruah, says the most positive outcome of the talks is that the two rivals agreed to remain engaged.

"I think contact is good, and whatever differences there are if we can state them in a civilized manner and yet make progress in which areas there can be agreement, I think that is the only way forward between India and Pakistan," he said.

The two nuclear-capable neighbors embarked on a peace process in January - two years after they stood on the brink of war in Kashmir.

The mostly Muslim province is divided between the two countries. India claims the entire region, Pakistan wants Kashmiris to decide their political future.

In recent months, the two countries have discussed issues ranging from terrorism, trade and transport links to military and nuclear confidence-building measures.

At the New Delhi talks Sunday and Monday, the two sides decided to explore more such measures.

Many of them are aimed at increasing contact between Pakistanis and Indians. A train link between India's Rajasthan state and the Pakistan's Sindh province, and more buses from northern India to a Sikh pilgrimage site in Pakistan are to be discussed. India also is pressing for a bus service between the Indian and Pakistani sides of Kashmir.

Officials also will examine the possibility of building an oil pipeline from Iran to India via Pakistan. So far, India had objected to the plan citing security concerns.

International relations professor Ashwinikumar Mahapatra, of New Delhi's Jawaharlal Nehru University, says small incremental steps will help sustain the peace process.

"Since they have agreed to carry on the discussions [it] shows they no longer believe or subscribe to the policy of hostility to resolve the bilateral conflict," he said. "They have agreed to reduce the conflict to a level where war no longer appears to be an attractive means to resolve the conflict."

Analysts say the New Delhi talks also set the stage for the first meeting between Indian Prime Minister Manmohan Singh and Pakistani President Pervez Musharraf later this month on the sidelines of the United Nations General Assembly in New York.

Mr. Singh took office in New Delhi three months ago. On Saturday, he appeared optimistic about carrying forward the peace process in his meeting with the Pakistani leader.

"My specific agenda is to normalize and expand our multifaceted relationship, to ensure that the two of us can work together to carry forward the peace process and carry forward the dialogue, which in due course of time will yield constructive results," he said.

While many political analysts say all this talk is good, they warn that failure to make progress on the core dispute over Kashmir could lead to frustration between the two countries, which have fought three wars and have some of the most heavily guarded borders in the world.