Nuclear-armed rivals India (search) and Pakistan (search) agreed Monday to notify each other before testing missiles, to open consulates and to work toward settling their five-decade dispute over Kashmir (search).

The agreements by their foreign secretaries are part of a peace process that began last year, geared to an eventual summit between the Indian and Pakistani leaders to resolve their claims to Kashmir. The nations have fought two of three wars over the Himalayan region, which remains divided between them.

Pakistani Foreign Secretary Riaz Khokhar met for six hours Sunday and Monday with his Indian counterpart, Shashank, who uses one name.

Khokhar brought invitations from Pakistani President Gen. Pervez Musharraf to Indian Prime Minister Manmohan Singh, President A.P.J. Abdul Kalam and Congress party leader Sonia Gandhi. Singh gave Khokhar a message to take back to Musharraf.

The foreign secretaries reiterated in a joint statement that the ongoing discussions would lead to peaceful settlement of "all bilateral issues," including Kashmir.

Both sides said the talks were productive.

"There is a new spirit of engaging each other consistently and substantively," said Pakistan's foreign ministry spokesman, Masood Khan. "You have to satisfy all the parties. That is the understanding that is emerging very rapidly."

Indian External Affairs Minister Natwar Singh said the foreign secretaries had "positive discussions and concrete outcomes."

In a series of new confidence-building steps, the two countries will work toward an agreement to notify each other before testing missiles. This follows an accord last week to set up a hotline to prevent inadvertent nuclear war.

The two countries have been abiding by an informal agreement to notify each other at least 24 hours in advance of a missile test launch. But India has sought a formal pact, that would commit each side to specify the size of the missile and location of the test, said defense analyst Brahma Chellaney.

India and Pakistan also will open consulates in Karachi, Pakistan and Bombay, India and restore their embassies to full strength of 110 staffers each. The embassy staffs were reduced after a December 2001 attack on India's Parliament led to a break in diplomatic relations and transportation links.

Since then, ambassadors — and bus, train and air service — have been restored.

India and Pakistan will free all fishermen seized in each other's territorial waters and work out ways to release other civilian prisoners, they said.

The foreign secretaries also discussed the possibility of opening a highway closed since the two nations became independent from Britain in 1947. The road connects the two parts of Kashmir, claimed in its entirety by both countries.

India and Pakistan haven't held substantive talks on Kashmir since 1998, although Musharraf and former Indian Prime Minister Atal Bihari Vajpayee discussed the issue, and failed to agree, in July 2001.

India accuses Pakistan of training, arming and funding Islamic militants fighting for merger of the Indian portion with Pakistan or winning its independence. Islamabad says it only supports the militants diplomatically and politically.

The 14 years of violence in India's only Muslim-majority state has killed more than 65,000 people.

More meetings, on economic cooperation and the technical details to implement the agreements, are to be held from the third week of July to the end of August the joint statement said.