NEW DELHI, April 4: Prime Minister Shaukat Aziz had a 50-minute bilateral meeting with Indian Prime Minister Manmohan Singh at his residence here on Wednesday morning during which they agreed to carry forward the peace process and pursue decisively the Iran-Pakistan-India gas pipeline project.

They also agreed to grant permission to their respective banks to open branches and increase air links between the two countries.

The two leaders first had a 30-minute delegation-level talks which were followed by a 20-minute one-on-one session with focus on bilateral relations, particularly Kashmir, Siachen and Sir Creek.

This was the third bilateral meeting between the two prime ministers since November 2004. They met last in Dhaka in November 2005.

At the delegation-level talks the prime minister was assisted by Foreign Minister Khurshid Kasuri, foreign secretary Riaz Mohammad Khan and Pakistan’s High Commissioner Shahid Malik. Additional foreign secretary Mr Zamir Akram was also present.

Talking to the media after the talks, Prime Minister Shaukat Aziz said he had a “good meeting” and a major point of discussion was the Iran-Pakistan-India gas pipeline project.

“We agreed that both Pakistan and India will pursue the Iran-Pakistan-India gas pipeline because it is in the interest of all three countries,” he said, adding: “The energy needs of India and Pakistan are substantial and we agreed in principal this morning that this project should move speedily ahead.”

Continuing on the subject he stated: “We have agreed to proceed as fast as we can to finalise the arrangements. Obviously pipelines have lots of complexities so we will deal with each issue one by one.”

The prime minister also said that he had detailed discussions on the gas pipeline project with Indian Petroleum and Gas Minister Mr Murli Deora who called on him on Tuesday night with the entire official hierarchy in the petroleum area.

On the peace dialogue he said: “We both agreed that this composite dialogue process must be taken forward and in every way. We are supporting the efforts, Pakistan and India both are committed.”

He said during the meeting the status and various aspects of peace process were discussed briefly. Noting that the dialogue process had certainly created a good atmosphere between the two countries, he declared: “We think this will lead to dispute resolution, we think this will lead to better ties.”

His response to a question regarding progress made on the issues of Kashmir, Siachen and Sir Creek and if he was more optimistic after his talks was: “The dialogue is ongoing and it is in various stages of discussion. So take it as work in progress.”

Without going into the specifics, he noted: “Every time we meet we move ahead. Eventually this will lead to a more tangible conclusion.”

Referring to the defence secretary-level meeting this week at which Siachen and Sir Creek issues would be discussed, he said: “In both areas we are moving ahead and progress is being made and the dialogue process that starts this week will address these two issues and take it to a logical conclusion eventually.”

The prime minister was evasive when asked if President Musharraf’s 4-points on Kashmir were discussed and left it at: “We discussed many things.”

He also raised the issue of release and repatriation of more than 500 Pakistani prisoners in Indian jails and Mr Singh directed his aides present at the meeting to look at each individual case. Mr Aziz said as a goodwill gesture he assured the Indian prime minister that boats of Indian fishermen captured in Pakistani waters would be released immediately.

The prime minister said he also raised the Samjhota incident with his Indian counterpart and underscored Pakistan’s interest in sharing of the findings by Indian investigators as most of the victims were Pakistani nationals. “The prime minister has agreed to keep us informed of the investigation process periodically,” Mr Aziz said.

Later a statement issued by Foreign Office spokesperson Tasnim Aslam said: “The Pakistan Prime Minister underscored the importance of resolving Kashmir (issue) for durable peace and brighter future of South Asia.” Trade issues and people to people contacts were also discussed.

“The forthcoming Defence Secretary level talks are expected to address the Siachen and Sir Creek issues to discuss ways and means to make substantive progress on the two issues,” the statement noted.

AFP adds: Pakistan on Wednesday said it had discussed with India its concerns about outside involvement in a tribal insurgency in its restive Balochistan province, a report said.