NEW YORK, Sept 25: Indian Prime Minister Manmohan Singh has pledged to resolve the water dispute with Pakistan in the spirit of the Indus Water Treaty.

The 1960 treaty distributes the water of Indus and its tributaries between India and Pakistan and provides a mechanism for resolving water disputes.

After a meeting with President Asif Ali Zardari on Wednesday, Mr Singh invited Pakistan’s water commissioner to visit India in October to inspect the controversial Baglihar Dam project over the Chenab River.

Islamabad believes that the dam has deprived Pakistan of critically needed water resources.

Under the treaty, Pakistan is to receive 55,000 cusecs of water but this year Pakistan’s share was drastically reduced, causing damage to crops.

Pakistan received between 13,000 cusecs during the winter and a maximum of 29,000 cusecs during summer. This averages around 22,000 to 25,000 cusecs -- less than half of Pakistan’s share.

In their brief remarks to the media, the two leaders said they also had decided to restart the stalled Composite Dialogue process.

Mr Singh said that a peaceful, prosperous and strong Pakistan was also in India’s interest.

Mr Zardari said that peace with India was part of Benazir Bhutto’s doctrine of peace, prosperity and progress. He also welcomed the Indian premier’s decision to resolve the water crisis.

He lauded the Indian prime minister’s leadership saying he had a lot to learn from the Indian prime minister. He joked that he and Mr Singh could chat in Punjabi.

The Zardari-Singh meeting went on for over an hour and was marked by a warm hug and a long handshake. President Zardari described Mr Singh as the “father of modern India”.

The Indian prime minister replied that he shared Mr Zardari’s vision for a better and improved South Asia to which the Pakistani president said: “It is Benazir’s wisdom.” Mr Singh congratulated Mr Zardari on his election as president and hailed the victory of democracy in Pakistan.

The two countries reached an agreement that would allow commerce across the Line of Control in Kashmir and open the land route for trade between New Delhi and Kabul.

The cross-LoC trade on the Srinagar-Muzaffarabad and Poonch-Rawlakot roads will commence on Oct 21. Modalities for opening the Skardu-Kargil route will be discussed soon.

The two neighbours agreed to open the Wagah-Attari road link to all permissible items of trade.

India and Pakistan have long demanded unfettered trade through this transit route and opening the road link will meet this demand.

The Khokrapar-Munabao rail route will also be opened to all permissible items of trade between India and Pakistan.

The decisions are part of a joint communique, issued after the one-to-one meeting between President Zardari and Prime Minister Singh.

The document not only seeks to promote trade but also includes clauses that can be interpreted as yielding too much to India.

The agreement binds Islamabad to “take severe action against any elements directing or involved in terrorist acts”.

It also commits Pakistan to probing Indian allegations that its intelligence agencies were involved in bombing the Indian embassy in Kabul in July this year.

India blames Pakistan for the attack. Pakistan strongly denies the charge.

“A special meeting of the Joint Anti-Terror Mechanism will be held in October 2008 to address mutual concerns including the bombing of the Indian embassy in Kabul,” said the joint communique.

Former president Pervez Musharraf and Prime Minister Singh had established this mechanism for fighting terrorism at a summit meeting in Havana, Cuba, on Sept 16, 2006. The first meeting of the Anti-Terrorism Mechanism was held in Islamabad on March 6, 2007.

The communique issued after the Zardari-Singh meeting quoted President Zardari as reassuring the Indian prime minister that the government of Pakistan stood by its commitments of Jan 6, 2004.

The 2004 agreement, signed after a historic Saarc meeting in Islamabad, binds Pakistan not to allow anyone to use its territory for carrying out terrorist attacks against its neighbour.

On Wednesday, Mr Zardari and Mr Singh also agreed that “the forces that have tried to derail the peace process between India and Pakistan must be defeated”.

The statement noted that this would allow the continuation and deepening of a constructive dialogue for the peaceful resolution and satisfactory settlement of all bilateral issues, including Jammu and Kashmir.

In their first meeting since Mr Zardari replaced Mr Musharraf, the two leaders agreed that the foreign secretaries of both countries would schedule meetings of the fifth round of the composite dialogue in the next three months which would focus on “deliverables and concrete achievements”.

The ceasefire in Kashmir should be stabilised. To achieve this goal, directors-general of military operations of both the countries and their sector commanders will stay in regular contact.

In July, India said Pakistan violated a 2003 ceasefire agreement for a second time in three days by firing shells at its posts in Kashmir. Pakistan denied the claim.

The Indian and Pakistani leaders agreed that the expansion of people-to-people contacts, trade, commerce and economic cooperation provide an effective platform to develop and strengthen bilateral relations.

To this end, they decided to continue interaction between the Planning Commissions of both countries to develop mutually beneficial cooperation including in the energy sector.

Mr Singh expressed the hope that the understanding reached in New York would pave the way for a profound transformation of the bilateral relationship, so that India and Pakistan could work together on their shared objectives of peace, prosperity and security.

Both leaders welcomed the several positive outcomes of the four rounds of the Composite Dialogue, which had brought their people, businesses and institutions closer, while permitting sustained efforts to be made to resolve all outstanding issues; these gains needed to be consolidated.

They agreed to work for an early and full normalisation of relations on the basis of mutual respect, peaceful coexistence and non-interference.

Both leaders acknowledged that the peace process has been under strain in recent months. They agreed that “violence, hostility and terrorism have no place in the vision they share of the bilateral relationship, and must be visibly and verifiably prevented”.

The pledge is part of confidence-building measures that depend heavily on boosting trade for improving ties.

The total trade between India and Pakistan rose to $1.67 billion in the 12 months to March 31, 2007, from $869 million in the previous year, according to India’s commerce ministry.

India and Pakistan have been rebuilding ties since April 2003, after coming close to war in 2002, by restoring diplomatic, sporting and transport ties.