Foreign secretaries from nuclear rivals India and Pakistan began a new round of peace talks Saturday on a series of festering issues, including their decades-old dispute over the Himalayan region of Kashmir (search).

India's Foreign Secretary Shyam Saran and his Pakistani counterpart Riaz Khokhar were expected to review progress made in previous talks, and to prepare for meetings that begin Sunday between both countries' foreign ministers.

Before the secretaries' talks began at a colonial-era mansion in New Delhi, Khokhar called it a "very auspicious day" — a reference to Saran's birthday, also Saturday.

The talks will focus on cross-border terrorism and trade as well as Kashmir, an Indian official said Friday on condition of anonymity.

Before leaving for New Delhi on Friday, Khokhar told reporters he would discuss eight issues, including Kashmir, with his Indian counterpart.

"We are going there with an open mind and a positive approach to make the talks process meaningful and result oriented," Khokhar said.

Observers in New Delhi said they didn't expect any breakthroughs at Saturday's talks.

"In my view we should have modest and realistic expectations about the results of these talks," said G. Parthasarthy (search), former Indian High Commissioner to Pakistan.

India is expected to propose a "softening" of the Line of Control, the frontier dividing Kashmir between India and Pakistan, by easing visa restrictions and letting people cross the border more easily, the official said.

Both countries claim all of Kashmir, and have fought two wars over the Himalayan territory since their independence from Britain in 1947.

Saturday's talks will also look at ways to reduce tensions in Kashmir, where India has long accused Pakistan of arming and training Islamic militant groups who cross to the Indian side and carry out terrorist strikes.

The rebel groups have been fighting Indian security forces since 1989, seeking Muslim-majority Kashmir's independence from predominantly Hindu India or its merger with mostly Muslim Pakistan. More than 65,000 people have been killed in the conflict.

Islamabad denies New Delhi's charge that it helps the militant groups materially, saying it offers only moral and diplomatic support. Pakistan also says it is clamping down on rebels on its territory.

But India says militants continue to cross the Line of Control from Pakistan-controlled Kashmir.

India's External Affairs Minister Natwar Singh and his Pakistani counterpart, Khurshid Kasuri, were to meet on Sunday.

Indian Prime Minister Manmohan Singh (search) and Musharraf are expected to meet on the sidelines of the Sept. 21-22 U.N. General Assembly in New York.