NEW DELHI, 5 April 2007 — Indian Prime Minister Manmohan Singh and his Pakistani counterpart Shaukat Aziz discussed a wide range of issues including Kashmir, Sir Creek, Siachen, bilateral trade and cooperation in energy and banking sectors, at a meeting here yesterday.

“We have discussed Kashmir and both the sides are satisfied that the talks are progressing in the right direction,” Aziz said at a press conference immediately after his talks with Manmohan.

The talks, lasting nearly an hour, were held on the sidelines of the SAARC summit.

Ahead of his talks with Manmohan, Aziz said that peace and prosperity in South Asia was not possible without a durable solution to the Kashmir row.

Manmohan assured Aziz that India would keep Pakistan informed about the progress in the train-bombing probe.

Aziz also raised the issue of about 500 Pakistani prisoners languishing in Indian jails and demanded their early release. He told Manmohan his government would ensure an early return of Indian fishing boats seized by Pakistani authorities. Aziz said his government was interested in exporting cement to India in view of the duty cut announced by New Delhi.

Aziz informed Manmohan about Pakistan issuing more visas to Sikh pilgrims visiting Pakistan.

India and Pakistan also renewed their commitment to a controversial pipeline that will supply Iranian gas to their two countries and said they would pursue the project sincerely and seriously.

The two neighbors are in talks with Tehran to buy natural gas to be transported through an ambitious $7 billion pipeline that has been opposed by Washington, which says the deal could help fund Iran’s alleged nuclear arms program.

“The two prime ministers discussed the Iran-Pakistan-India gas pipeline project and reaffirmed their commitment to sincerely and seriously pursue the project for its successful completion,” a Pakistani statement said. The pipeline project, which aims to feed the growing energy needs of the subcontinent, has made slow progress due to political tensions between India and Pakistan and differences between New Delhi and Tehran over the latter’s controversial nuclear program.

Washington, which accuses Tehran of developing a covert nuclear weapons program, has repeatedly sought to discourage India from the project.

But New Delhi has stayed the course despite voting against Iran’s nuclear plans at global bodies. The three countries are expected to sign a key agreement on pricing in June that will help the pipeline project take off.

On Tuesday, Aziz said the pipeline would create “linkages and interdependencies” between India and Pakistan and strengthen a slow peace process between the historic rivals who have gone to war three times in the last 60 years.