India, Pakistan agree to continue peace dialogue

NEW DELHI, Thursday (Reuters) - South Asian rivals India and Pakistan have agreed they would not let terrorism impede their peace process and remained committed to a peaceful resolution of all disputes, including Kashmir.

The nuclear-armed neighbours issued a joint statement after Indian Prime Minister Manmohan Singh and Pakistani President Pervez Musharraf held a late night meeting on Wednesday on the sidelines of the U.N. General Assembly in New York. "The two leaders ... reiterated their pledge not to let terrorism impede the peace process," said the statement read out by Musharraf to reporters in Singh's presence.

"They expressed their commitment to ensure a peaceful settlement of all pending issues including Jammu and Kashmir to the satisfaction of both sides."

"They agreed that possible options for a peaceful, negotiated settlement in this regard should continue to be pursued in a sincere spirit and purposeful manner," Musharraf said in the televised address to the media. Television reports in India and Pakistan said Musharraf invited Singh to visit Pakistan and the invitation had been accepted.

Ties between the neighbours have improved since they launched a peace process in January 2004, but they have still to make substantive progress on a core dispute over the divided territory of Kashmir, which both claim in full.

in 2002 but agreed to a ceasefire in Kashmir in late 2003.

In the joint statement, India and Pakistan also welcomed the recent release of prisoners on both sides and agreed to continue this process on a "humanitarian basis".

The rivals swapped hundreds of prisoners at a border post on Monday to foster goodwill as they seek to push their sluggish peace process forward.