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Summit ends with hopes for India-Pakistan peace

ISLAMABAD, Tuesday (Reuters) South Asian leaders wrapped up their first summit in two years on Tuesday, a gathering that saw the first talks between nuclear-armed rivals India and Pakistan since 2001 and raised hopes for greater regional cooperation.

The seven-nation South Asian Association for Regional Cooperation (SAARC) agreed to launch a free-trade area from 2006, to draw up a social charter for its 1.4 billion people and to fight terrorism. In a show of unity at the concluding session of the three-day summit, foreign ministers linked hands after signing the three documents while their leaders looked on and applauded.

But the success of moves towards SAARC's aim of greater integration hinges on peace between India and Pakistan, its biggest members.

Officials have declined to give details of Monday's ground-breaking talks between Indian Prime Minister Atal Behari Vajpayee and Pakistani President Pervez Musharraf, or to say whether they had made any progress towards resolving their decades-old dispute over Kashmir, the heart of their rivalry.

But diplomats said the Vajpayee-Musharraf meeting was in itself a step forward in the slow process of rebuilding relations.

Pakistan said "detailed discussions" with India had taken place in a good atmosphere and both sides said the leaders were keen to keep the momentum going to repair relations. Past attempts to make peace have often failed under the weight of overblown expectations, or because they were sabotaged by hawks on both sides. It remains unclear whether the talks have taken the two sides any closer on the issue of Kashmir.

Diplomats say both Vajpayee and Musharraf appear keen to move forward, but it was not clear if they would find any middle ground.

Vajpayee called for continuous contacts between the neighbours, but cautioned that it would take a long time to resolve their disputes.

The framework agreement to reduce or eliminate tariffs is the most tangible development to come out of the summit, but it will depend on better India-Pakistan relations. Pakistan's Prime Minister Zafarullah Khan Jamali acknowledged that in his closing address to the meeting

"We have succeeded in reintegrating regional cooperation. We have made good progress on South Asia preferential tariff arrangements and a South Asia free trade area. These are watershed developments," he said.

But he added: "Peace and stability are an essential prerequisite to address the multifarious challenges of socio-economic development."

Meanwhile the United States will keep cheering on Pakistan and India from the sidelines as the two warily rebuild diplomatic relations, but New Delhi's opposition and unpromising historical precedent make it reluctant to play matchmaker.

Senior US officials, who have watched the South Asian powderkeg with alarm, were encouraged by a meeting between Indian Prime Minister Atal Behari Vajpayee and Pakistan's President Pervez Musharraf at a South Asian summit.

"We encourage direct dialogue as the best way for India and Pakistan to resolve any issues between them," said White House national security spokesman Sean McCormack. Washington has confined itself to short but intense spurts as a diplomatic "fireman" when tensions flare in South Asia, using repeated telephone calls to New Delhi and Islamabad, and snap missions by top envoys like Secretary of State Colin Powell.

"You can't help two different sides to resolve a difference, if one of them doesn't want you in that particular role," said a State Department official, explaining US reluctance to serve as a mediator.

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