THIMPHU, Bhutan - The prime ministers of India and Pakistan held "very good talks" on Thursday and asked their officials to take steps as soon as possible to normalise relations, officials said, signalling an unexpected thaw.

Indian Prime Minister Manmohan Singh and his Pakistani counterpart Yousuf Raza Gilani met while in Bhutan for a summit of South Asian leaders, their first meeting in nine months.

"The idea was on renewal of dialogue; to understand the state of affairs," Indian Foreign Secretary Nirupama Rao told a news conference after the meeting.

"There was a lot of soul-searching here. The searchlight is on the future, not on the past."

She said the two prime ministers had asked their foreign ministers and foreign secretaries to meet "as soon as possible to work out the modalities for restoring trust" and taking the dialogue forward.

Pakistan Foreign Minister Shah Mehmood Qureshi said the climate of talks had changed for the better and the two leaders had asked their officials to meet as frequently as possible.

"I don't think either side was expecting such a positive turn in dialogue," Qureshi told reporters. "It was a step in the right direction and it was in the right spirit."

Both sides have been tentative about meeting. There are differences over the nature of talks: Pakistan wants India to restart the broader peace process it broke off after the Mumbai attack, while India wants to go slow until Islamabad acts against the planners of that carnage.

But Thursday's meeting signalled New Delhi was willing to shift from its well-entrenched position on resuming talks with Rao saying the focus was how to carry the dialogue forward to resolve "all issues of concern".

"I do not think we have to get stuck with nomenclature. Both sides agreed dialogue was the only way forward," she said when asked if these talks were not in effect resumption of the broader peace dialogue India suspended after the Mumbai attacks.

Qureshi said the present round of talks were unconditional and all issues between the two countries were on the table.

"The two prime ministers have agreed to resume a dialogue process that remained suspended for so many months," he said, without giving further details.

Playing to the US?

While Thursday's meeting showed that both sides may be willing to focus on improving ties, there are also fears that their strong domestic compulsions may stop them from making the concessions needed for a breakthrough.

"This sounds good for everyone, but translating that into practice is not going to be easy because both sides are playing to the public gallery both at home and internationally," said Brahma Chellaney, a strategic affairs expert at the Centre for Policy Research in New Delhi.

Re-engaging Islamabad is a politically fraught move for New Delhi, given strong Indian sensibilities about Pakistan, but a nudge from Washington and dwindling diplomatic options stemming from no talks saw India reaching out.

Although Singh and Gilani briefly exchanged pleasantries in Washington this month, the meeting in Thimphu was their first substantial contact since controversial talks in Egypt in July when the two agreed not to make the peace process conditional on actions against terrorism.

That move was slammed by Indian opposition groups, forcing the government into the defensive on its Pakistan policy.

One risk to normalising relations is that another major militant attack in India and the subsequent domestic political pressure could force the government to break off the dialogue process again.