ISLAMABAD, June 23: Pakistan and India have failed to reach an understanding over interpretation of certain provisions of the 1960 Indus Waters Treaty on Indian plans to construct Wullar Barrage in occupied Kashmir but agreed to continue discussions during the next round of the composite dialogue.

“There will be a breakthrough when there is perfect understanding and agreement on both sides,” Indian Water Resources Secretary J. Hari Narayan said on Friday at the end of two-day talks over Wullar Barrage/Tulbul Navigational Project as part of the third round of the composite dialogue.

Water and Power Secretary Ashfaq Mehmood termed as hypothetical a question about referring the case to the World Bank for arbitration.

He said the two sides had very useful discussions and hopefully there would be some progress in talks in the next round. He said the foreign ministries of the two countries would decide the dates of the next round.

The foreign secretaries of the two countries are expected to meet next month.

An official said the Indian side had been told in clear words to abandon the project as nothing less would be acceptable to Islamabad to resolve the issue under relevant provisions of the treaty. India reiterated its stand that the proposed project did not violate the treaty.

The official said the 22-year old Wullar Barrage issue should not be seen in isolation because it was now part of the eight-point agenda of the composite peace process and there were other items pending since the partition of the sub-continent.

A joint statement said “the talks were held in a cordial and constructive atmosphere. The two sides exchanged views on the project and had a better understanding of each other’s views. They reaffirmed their commitment to the Indus Waters Treaty 1960.”

It said the two sides agreed to continue discussions during the next round of composite dialogue with a view to resolving the issue in accordance with the provisions of the treaty.

This was the 12th round of talks on the dispute, which emerged in 1984 after India planned to build a barrage on outfall of the Jhelum River in occupied Kashmir with a storage capacity of 324,000 acre-feet without informing Pakistan, as was required under the treaty.

The Indian delegation also called on Water and Power Minister Liaqat Ali Jatoi. Mr Jatoi said that Wullar Barrage, Kishanganga Barrage and all other issues should be resolved amicably through composite dialogue.