NEW DELHI, 27 October — Saying that it was acting in “larger national interests”, the Congress party yesterday agreed to Mufti Muhammad Sayeed of the People’s Democratic Party (PDP) heading a coalition government in Jammu and Kashmir.

The decision to make Sayeed the new chief minister of the state was taken at a meeting between him and Congress President Sonia Gandhi yesterday. The Communist Party of India-Marxist (CPM), the Panthers Party and some independents will also be part of the coalition.

“We have decided that Mufti Muhammad Sayeed will be leading the government in Jammu and Kashmir,” Sonia told reporters in Delhi. “We are determined to see that the hopes and aspirations of the people of the state are fulfilled.”

Sayeed hoped that the aspirations of the people of Kashmir, who had voted fearlessly in spite of terrorist threats, would now be fulfilled.

“To meet the challenges ahead, we have decided to unite and work out an agenda, a common minimum program,” said Sayeed, who was home minister in the government of former Prime Minister V.P. Singh in 1989-90.

“This is a golden opportunity, a turning point in the history of the state. We will give a healing touch to the people of the state.”

The decision comes after more than two weeks of negotiations between the two parties that had almost broken down earlier this week with the Congress and the PDP insisting that the chief minister come from their party. Sonia maintained that the decision had been taken “in the larger interests” even though the chief ministers of other Congress ruled states had insisted that the party should head the coalition in the state.

The nitty gritties of the common minimum program and the question of whether there would be a deputy chief minister would be worked out at a meeting today, Sayeed and Sonia said.

“The common minimum program would also be seen by the other coalition partners,” Sonia added.

Earlier yesterday, the PDP and the Congress crossed the first hurdle in forming a coalition government in the state by agreeing to the common minimum program for governance.

One of the main objectives of the program would be to usher in “peace with honor” to the insurgency-hit Himalayan state, leaders of the two parties said. The breakthrough followed several hours of talks between Congress leaders and Sayeed and his daughter Mehbooba Sayeed.

“All differences have been reconciled,” said Congress Working Committee member Arjun Singh.

Asked to disclose some of the points in the common agenda, the Congress leader said: “Our mandate has to be translated into practice... The agenda would include bringing peace with honor back to Jammu and Kashmir and development of the state.”

The hectic parleys and bargaining brought a taste of familiar coalition pangs to the state plagued by two decades of militancy.

The PDP has softened from its earlier demand for nothing less than the chief minister’s post in a coalition with the Congress but, as a face-saver, wants the first term in rotational chief ministership. With 16 seats in the 87-member assembly, Sayeed’s party had doggedly insisted earlier that the chief minister should be from the Kashmir Valley, where it fared better than the Congress.

On the other hand, the Congress, which won most of its 20 seats from the Jammu region, was equally determined that its state President Ghulam Nabi Azad be the chief minister.

The political impasse led to governor’s rule in the state after the National Conference, which lost the elections but finished as the single largest party with 28 seats, resigned from office. This week the Congress reopened the door for talks and invited Sayeed to New Delhi for a fresh shot at an alliance.

As the negotiations continue in New Delhi, Kashmir has started preparing for an oath-taking ceremony to mark the installation of a new government.

State Chief Secretary I.S. Malhi met top officials to discuss security and other arrangements for the ceremony, likely to be held at the Sher-e-Kashmir International Convention Center.

Meanwhile, five militants and a politician’s wife were among 10 people killed in separatist violence in Kashmir, police said yesterday.

Three rebels and an army soldier were killed in a fierce gun battle overnight in south Kashmir, police said. In a separate incident, two militants were killed yesterday by troops near Shoo-in, 50 km south of Srinagar, police said. They said two people died elsewhere in Kashmir. Police said a servant employed by a pro-India politician, Mushtaq Mir, opened fire yesterday at the leader’s wife and a security guard in Anantnag town. The two were shifted to hospital where they died.