Pakistani Foreign Minister Khursheed Mehmood Kasuri (Right) greets his Indian counterpart Pranab Mukherjee at the Foreign Ministry in Islamabad, January 13. Pakistan and India discussed ways to shift their three-year-old peace process on to a new level on Saturday, during a visit to Islamabad by India's new foreign minister. -REUTERS

ISLAMABAD, (Reuters):

Pakistan and India discussed ways to shift their three-year-old peace process on to a new level yesterday during a visit to Islamabad by India's new foreign minister.

Pakistani President Pervez Musharraf said in a statement after meeting Foreign Minster Pranab Mukherjee that confidence-building measures taken so far had "created a conducive atmosphere to resolve outstanding issues".

He said greater cooperation between the two nations, which have remained at odds since independence from British colonial rule in 1947, would flow from settling three disputes.

The most problematical issue remains how to bring lasting peace to the divided Himalayan region of Kashmir.

An insurgency raging since 1989 in India's only Muslim majority state has killed more than 45,000 people.

Levels of infiltration by militants into Indian Kashmir from Pakistan have fallen in the last three years, but Islamist militants have mounted bomb attacks in other parts of India.

Other disputes mentioned by Musharraf were Siachen Glacier, an icy wasteland the two armies have fought over since the 1980s, and Sir Creek, an estuary flowing into the Arabian Sea.

The nuclear-armed South Asian rivals began a peace process in 2004 after they went to the brink of a fourth war in 2002.