"Ideas and proposals were exchanged to take the (peace) process further. Discussions were held in a positive and constructive atmosphere," Indian foreign ministry spokesman Navtej Sarna told reporters at the end of a first round of negotiations in New Delhi between senior diplomats from both sides.
The talks, between Indian Foreign Secretary Shashank, who uses only one name, and his Pakistani counterpart Riaz Khokhar, will continue into a final day on Monday, Sarna said.
The discussions are being held against a backdrop of surging violence in Kashmir and the surprise resignation of Pakistani prime minister Zafarullah Jamali on Saturday.
Sarna said the proposals exchanged Sunday were aimed at "creating mutual trust and better understanding" between the two sides, who have fought three wars, two of them over Kashmir.
"Clearly the aim was ... to carry this process forward," he said.
Masood Khan, Pakistan's foreign ministry spokesman, was equally upbeat.
"The atmospherics were positive," Khan told a press conference at the Pakistani High Commission here shortly after Sarna had briefed the media.
"The talks were held in a conducive atmosphere. Both sides engaged each other intensely, fully and professionally. There were no difficulties and there was a free flow of communication and exchange of ideas and views."
The proposals exchanged Sunday were aimed at "creating mutual trust and better understanding"
Indian foreign ministry
The discussions were the first between the nuclear-armed neighbours on Kashmir, their number one cause of disagreement, since a peace initiative collapsed in 2001.
On Monday, the two delegations will tackle the more complex issue of resolving the dispute over Kashmir, which is divided between India and Pakistan and claimed in full by both.
"There will be talks tomorrow on Kashmir. The attempt is to find a solution,” Khan said.
"Now we are focused on dialogue ... the political leadership on both sides is trying to come up with solutions acceptable to the people of India, Pakistan and Kashmir."
He said Sunday's talks had focused on confidence-building measures such as lowering of troop numbers along the borders in Kashmir.
They also discussed the question of soldiers missing in previous conflicts and the repatriation of errant civilians, especially fishermen who had strayed into each other's waters.
According to India's Sarna, also on the table are issues such as a bus service linking the two zones of divided Kashmir, another connecting Sindh in Pakistan with Rajasthan in India and the opening of consulates in Mumbai and Karachi.
The last time India and Pakistan sat down to settle key differences were in 2001 at a failed summit in the Taj Mahal city of Agra between India's then-premier Atal Behari Vajpayee and Pakistani President Pervez Musharraf.
Soon after his arrival on Saturday, Khokhar met Kashmiri separatist leader Syed Ali Geelani and on Sunday met two other separatists, Shabir Shah and Yasin Malik.
Pakistani spokesman Masood
Khan: Positive atmospherics
India says all of Muslim-majority Kashmir is an integral part of its territory and accuses Pakistan of fomenting an insurgency against Indian rule that has claimed tens of thousands of lives since 1989.
Pakistan, which controls about a third of the disputed region, rejects the charges but calls the rebellion a "freedom struggle" and demands a plebiscite among Kashmiris as called for by UN resolutions.
In the middle are Kashmiris, whose separatist leaders have unsuccessfully sought a role in the India-Pakistan talks.
"You have to resolve the issue with the accordance of the wishes of the Kashmiri people," Khan said.
"Kashmiris are a principal party to the dispute. A viable solution, a just solution must mirror the aspirations of the Kashmiri people."