India's two main opposition parties agreed Saturday to try and form a new coalition government in Indian-controlled Kashmir -- possibly ending nearly three weeks of dispute about the state's most powerful post.

If successful, Mufti Mohammad Sayeed, leader of the regional People's Democratic Party, would head the government as the state chief minister. The People's Democratic Party would then rule in eeting with Sayeed in the Indian capital, New Delhi.

The two parties have a combined 36 seats in the 87-member legislature. Seven independent lawmakers and four from the Jammu-Kashmir Panthers' party also pledged their support to the coalition -- giving the parties the majority of the assembly's seats.

The parties will meet with the state governor next week and it is expected that he will allow them to form a government before a formal vote is taken in the assembly.

Gandhi said other details, including her own party's participation in the government, would be worked out Sunday.

"It's a golden opportunity. It can be a turning point in the history of Jammu-Kashmir if we are able to live up to the expectations of people," Sayeed said.

On Saturday, a Pakistan-based Islamic rebel group, Al-Umar Mujahedeen, warned Sayeed People's Democratic Party against joining the new government in Indian-controlled Kashmir.

In a statement faxed to various newspapers in Srinagar, the summer capital of Indian-held Kashmir, Mushtaq Ahmad Zargar, the rebel group's top commander, warned Sayeed of "forceful action" if he joined the new coalition which he described as an "Indian puppet government."

The statement was issued hours before Gandhi announced her party's coalition with Sayeed's regional group.

The new coalition was not expected to lead in major changes in policy for the disputed Himalayan state, which is also claimed by Pakistan.

Both opposition parties support Kashmir remaining a part of India, as does the National Conference.

No single party emerged the winner in recent elections -- Sept. 16 to Oct. 8 -- but voters ousted the National Conference party, which had dominated politics in Jammu-Kashmir for 50 years.

Islamic militant groups have fought for Kashmir's independence or its merger with Pakistan since 1989. They called for a boycott and threatened voters and candidates. Dozens of political activists were killed during the campaign.