"Talks were held in a cordial, constructive, friendly atmosphere," said Jalil Abbas Jilani, South Asia director general in the Pakistani foreign office, who led a team of five in New Delhi.
"Both sides exchanged their ideas. The outcome will be told tomorrow," he said on Tuesday.
An Indian foreign ministry source said: "India is flexible in its approach and wants communication links to be restored as soon as possible."
The talks were expected to focus on the issue of what kind of travel documents bus passengers would have to carry to cross the volatile border, the Line of Control.
Pakistan is said to oppose residents in its area of Kashmir travelling on passports and visas, fearing it would be equal to accepting the LoC as a permanent border and the final division of the state which both countries claim in full.
However, the Indian source stressed: "The basic position is that passports will have to be used, maybe along with some other documents."
The bus service is to link Srinagar
The proposed service would link Srinagar, capital of Indian-administered Kashmir, with Muzaffarabad, capital of the part of the scenic Himalayan region held by Pakistan.
The connection was halted after the first war between the two countries in 1947. Ever since, resuming the service has been a demand of Kashmiri families divided by the LoC.
Islamabad is pushing for arrangements such as local police or civil administrators on both sides issuing travel permits.
Kashmiri separatists opposed to Indian rule are also against the use of passports for travellers.
The LoC is one of the most militarised frontiers in the world, and until 26 November 2003 - when both sides agreed to a ceasefire - the two armies used to exchange artillery fire across the rugged mountains daily.
Meanwhile, several hundred political activists led by chief Muslim cleric Mirwaiz Umar Farooq on Tuesday observed a day's hunger strike in Srinagar to protest against alleged human rights abuses by Indian security forces.
Yusuf Jameel, Aljazeera.net's correspondent in Srinagar, said the moderate faction of Hurriyat Conference, an amalgam of Kashmiri separatist parties, had issued the call for the strike.
Mirwaiz Umar Farooq (3-L) is
leading the hunger strike
The latest action was a follow up of protests that occurred after the alleged rape of a villager, Aisha, and her 10-year-old daughter Shugufta by an Indian Army major in November.
The accused was arrested and is facing a court martial. However, Aisha's husband has accused the army and members of India's National Human Rights Commission of pressuring the victims to withdraw their complaint in lieu of money.
India has denied its security forces commit excesses on the people of Kashmir, but says that whenever an "aberration" takes place the guilty soldiers are punished as per the law.
Significantly, pro-Indian regional National Conference, which ruled the state for six years prior to the current administration, also joined the hunger strike.
India is facing a 16-year-old rebellion by separatists in the disputed Himalayan region.
So far, more than 42,000 people have died in the conflict according to official Indian statistics, although local human rights and political groups put the toll between 80,000 and 100, 000.