India and Pakistan held their first official talks since the 2008 Mumbai attacks on Thursday, a meeting that is unlikely to lead to an immediate breakthrough but may help thaw relations between the two nuclear-armed neighbours.   

Any progress made by the two nations' top diplomats may also help Western efforts to stabilise Afghanistan, where India and Pakistan have engaged in a battle for influence.

Pakistan Foreign Secretary Salman Bashir and his Indian counterpart Nirupama Rao met in a former princely palace in a heavily-guarded New Delhi neighbourhood that also houses the parliament and the presidential palace.

Rao, wearing a black and red sari, and Bashir in a dark suit shook hands in front of the camera before walking into a sprawling room for a one-on-one meeting followed by delegation-level talks.

The two countries have to agree which subjects should be covered in the talks -- India wants to focus on terrorism while Pakistan eyes the disputed Himalayan region of Kashmir that has been the cause of two of their three wars.

"Terrorism is a regional, global concern. It's our concern as well," Pakistani Foreign Ministry spokesman Abdul Basit told reporters shortly before talks began. "But Kashmir issue is the core .... It is an issue that continues to bedevil our relationship and not discussing this issue will not do justice to this meeting."    

On Wednesday, Indian border guards in Kashmir came under fire from Pakistan, an Indian official said, the latest in a spate of clashes in the Himalayan region.

India accuses Pakistan of cross-border firing to help militants cross the heavily militarised frontier to join a 20-year revolt in its only Muslim-majority region. Pakistan says it only gives moral support.

The talks in New Delhi also come amid a foreboding sense in India that the bombing of a popular bakery in the western city of Pune this month, which killed at least 16 people, may herald more attacks.

If that happened, it might make it politically difficult for India to build on whatever progress is made on Thursday.   

A second attack like Mumbai could shake what has so far proved to be a resilient Indian economy, analysts say. It could also snuff out prospects of a revival in trade between the two countries, which rose almost four-fold to $2.25 billion between 2004 and 2008.

Hundreds of police guarded the capital New Delhi where the meeting between the two foreign secretaries almost coincided with a hockey World Cup tournament this month that Islamist militants reportedly have threatened to disrupt.

Police kept vigil from behind sandbag pillboxes and controlled traffic around the talks venue. India broke off official talks after the Mumbai attacks, saying dialogue could resume only if Pakistan acted against militants on its soil that New Delhi blamed for the carnage.

Re-engaging Pakistan was a politically fraught move for New Delhi, given strong Indian public opinion against talks, but a nudge from Washington and dwindling diplomatic options saw India reaching out to Islamabad.

Expectations from the talks were modest, and a simple pledge to continue the dialogue may be the best officials can hope for.

"Trust Deficit As India-Pak Talks Resume," said a front-page headline in the Hindustan Times newspaper, reflecting the Indian media's muted expectations from the dialogue.   

Washington sees better India-Pakistan relations as crucial so lslamabad, not having to worry about its eastern border with India, can focus on fighting the Taliban on its western border with Afghanistan.   

US pressure apart, India's willingness for dialogue with Pakistan now could be aimed at boosting the credibility of the civilian government in Islamabad in the face of military hawks in the army and its military intelligence, Indian analysts say. - Reuters