AGRA, 16 July — The two rounds of talks on the first day between Indian Prime Minister Atal Behari Vajpayee and Pakistani President Pervez Musharraf ended yesterday on a positive note with Musharraf terming his one-on-one meeting with Vajpayee “fruitful and moving in right direction.” But in the middle of the night the Pakistani delegation issued a statement criticising the comments of Indian Information Minister Sushma Swaraj who had earlier said that talks touched on four subjects of interest to India— but omitted mention of the dispute over Kashmir.

Musharraf earlier extended an invitation to Vajpayee to visit Pakistan which the Indian premier promptly accepted.

Ensconced in a luxury hotel in the shadow of the Taj Mahal, Vajpayee and Musharraf held two rounds of one-on-one discussions that lasted a total of two-and-a-half hours, with the final session ending at 8:30 p.m. (1500 GMT).

A brief official statement approved by both sides said the first session, followed by delegation-level talks, had been held in a “very cordial, frank and constructive manner,” but gave no details as to the substance of the meetings.

During a sightseeing visit to the nearby Taj Mahal in the afternoon, Musharraf told reporters that the first round of talks had been “fruitful.” The official statement said both sides had agreed to extend the summit into this morning.

Initial comment from senior officials on both sides had struck a positive note. “The safe conclusion should be that there is understanding and there is positive movement,” said Musharraf’s spokesman Rashid Qureshi.

Just before the two leaders began their evening talks, Pakistan government spokesman Anwar Mahmood contradicted Indian officials who said the earlier discussion had been wide-ranging.

“In the one-on-one meeting, the focus was on Kashmir. We have made it clear that we can discuss other subjects also, but primarily we first have to discuss Kashmir,” Mahmood said. “There cannot be any movement on any other issue, unless there is movement on Kashmir.”

Indian Information Minister Sushma Swaraj said she was optimistic that something “positive and tangible” would emerge. Indian and Pakistani sources confirmed nuclear issues dominated the talks yesterday.

But Sushma said both the leaders took up the thorny issues of cross border terrorism, and Indian POWs. It is learned that Musharraf expressed complete ignorance of the presence of Indian POWs in Pakistan. However, he assured Vajpayee he would look into the matter.

Musharraf raised the “core issue” of Kashmir. Sources from both the sides said that the two  leaders agreed that the matter should be continuously discussed at the ministerial level and that the issue could not be resolved overnight and needed further deliberations.

Musharraf and Vajpayee are likely to address a joint press conference after the final round. Both the sides confirmed that a joint communiqué may be released after the summit.

But fears remained that the talks would founder on the crucial issue of Kashmir, where Indian troops said 18 activists had been shot dead yesterday as they crossed over from Pakistani territory. Another 20 were killed in the disputed Valley in sporadic incidents of shooting. Indian and Pakistani troops also exchanged machine-gun fire in the Arnia and Samba sectors, around 50 km from Kashmir’s winter capital Jammu.

The shooting “lasted for 150 minutes and sparked panic in the area,” a defense source said. No Indian troops were injured, while casualties on the Pakistani side “could not be ascertained,” the source added. In Srinagar, Kashmir’s summer capital, BSF troops frisked pedestrians and searched vehicles for arms and ammunition at Lal Chowk, the city’s commercial hub and the site of dozens of bomb explosions in the past.

The Indian Army stationed in Kashmir yesterday denied reports that it was planning to pull out 20,000 troops from the disputed state along the border with Pakistan.

“We have not received any such orders from our high command in New Delhi,” Col. S. P. K. Singh, spokesman for the Indian Army’s Northern Command, told AFP by telephone from his headquarters in Udhampur.

On Saturday, defense sources in Kashmir had said that 10,000 troops would be pulled out from the region within a week and another 10,000 over the next month.

Indian External Affairs Minister Jaswant Singh held a one-on-one dialogue with his Pakistani counterpart Abdul Sattar as the delegates split up into groups and held discussions at various venues. Talks were resumed after Musharraf, accompanied by his wife, visited the Taj Mahal. The meeting was being held under tight security with marksmen in position atop the Jaypee Palace hotel near the Taj Mahal where the summit is taking place and where Vajpayee and the Indian delegates are staying and at Amar Palace, where the Pakistanis have been put up.

Cars from Delhi were being thoroughly checked and sniffer dogs were being used to look for bombs and mines.