Indian Prime Minister Manmohan Singh and his Pakistani counterpart Yousaf Raza Gilani are in Bhutan for a summit of South Asian leaders. This was their first meeting in nine months.

"Foreign ministers and foreign secretaries should meet as soon as possible," Rao told reporters after the meeting.

Rao's statement signaled some improvement in ties between the two rivals that have been in a diplomatic freeze since the 2008 Mumbai attacks. Stability between the two nuclear powers is seen as key to helping US led efforts to bring peace to Afghanistan India suspended a sluggish peace process with Pakistan after the Mumbai attacks, blaming Pakistan-based militants. Islamabad wants resumption of that dialogue, but New Delhi has said it should happen only if the attack planners were punished.

Re-engaging Islamabad was a politically fraught move for New Delhi, given strong Indian sensibilities about Pakistan, but a nudge from Washington and dwindling diplomatic options stemming from no talks saw India reaching out.