The leaders of India and Pakistan have launched a fresh effort to improve the troubled relationship between the two nuclear-armed rivals. The two men met on the sidelines of the U.N. General Assembly meeting in New York. They agreed on several confidence-building measures, including the possibility of a joint gas pipeline project.

Indian Prime Minister Manmohan Singh and Pakistani President Pervez Musharraf emerged smiling from their one-hour meeting at a New York hotel. Prime Minister Singh could be heard saying, "I believe this is a historic day. We have made a new beginning."

A statement issued after the meeting said the two leaders had reiterated their commitment to bilateral dialogue and to restore normalcy and cooperation between India and Pakistan.

The statement said they had agreed to several measures aimed at building mutual trust. Among them is a possible gas pipeline through Pakistan to India. The pipeline is envisioned as a project that could contribute to the welfare and prosperity of the people of both countries.

The two leaders also discussed the contentious issue of Kashmir. They agreed to explore possible options for a peaceful negotiated settlement of their long-running dispute over the region.

The two countries have fought three wars since independence in 1947.

Friday's meeting was the first between the two men since Prime Minister Singh became India's leader earlier this year.

The meeting began on a warm note, as President Musharraf presented the Indian leader an album of photographs from the town where Mr. Singh was born. The two men noted the irony that the Indian leader had been born in what is now Pakistan, while the Pakistani leader was born in what is now India.

The meeting is being seen as giving new hope to a relationship that has seen more downs than ups in recent years. In his address to the General Assembly a day earlier, the Indian leader had struck an optimistic note. "I reaffirm our determination to carry forward this dialogue to a purposeful and mutually acceptable conclusion," he said.

President Musharraf was equally hopeful in his General Assembly address earlier in the week. He told reporters Thursday it is time to solve the nearly six-decade-old dispute over Kashmir. "Let's solve the Kashmir dispute. Address it head on. Let's catch the bull by the horn. Let's resolve the Kashmir dispute," he said.

Indian and Pakistani diplomats described this first meeting between the two leaders as a good start, but said there had not been a substantive discussion of the Kashmir issue. One senior diplomat said he was encouraged that the one-on-one session had lasted more than an hour before aides and other ministers joined the talks.

There was no immediate word on when the two leaders might meet again.