The prime ministers of India and Pakistan have agreed that the two countries relations should be normalised after months of diplomatic deadlock prompted by the attacks on the Indian city of Mumbai in 2008, according to officials.
India's Manmohan Singh met Yusuf Reza Gilani, his Pakistani counterpart, on the sidelines of a summit of South Asian leaders in Bhutan's capital, Thimpu, on Thursday.
Nirupama Rao, India's foreign secretary, said that the two men had "very good talks".
"Foreign ministers and foreign secretaries should meet as soon as possible," Rao told reporters after the meeting.
India broke off a peace dialogue with Pakistan after 166 people were killed as armed men rampaged through Mumbai in November 2008.
Since then, New Delhi has repeatedly rejected Islamabad's calls for a resumption, insisting that not enough has been done enough to bring members of the Pakistan-based group that India blames for the attacks to justice.
The two men last met on the sidelines of a summit of the Non-Aligned Movement in Egypt, where agreed with a joint statement that action on terrorism "should not be linked" to peace talks.
Kalim Bahadur, a retired professor of South Asian studies, from Jawaharlal Nehru University in New Delhi, said the talks in Bhutan were a "positive development".
"But we shouldn't have too many expectations. We could perhaps expect the two leaders to open the door for further dialogue between the foreign secretaries," he told the AFP news agency.
Some observers suggested that the meeting was, in part, forced by other leaders of the eight-nation South Asian Association for Regional Co-operation, who were tired of the dispute overshadowing their efforts at co-operation.
Mohammed Nasheed, the president of the Maldives, voiced his frustration at the situation on Tuesday.
"I hope neighbours can find ways to compartmentalise their differences while finding ways to move forward," he said in his speech at summit's opening.
"I am of course referring to India and Pakistan. I hope this summit will lead to greater dialogue between them."
The nuclear-armed South Asian neighbours have fought three wars since independence from Britain in 1947.