Associated Press WriterKATMANDU, Nepal (AP) -- Breaking weeks of tension, the foreign ministers of India and Pakistan shook hands and smiled on Wednesday, hinting that diplomatic talks could ease the disharmony that has pushed troops toward their shared frontier.
But suspected Islamic militants detonated two grenades near the legislature in Srinagar, killing one policeman and wounding at least 24 other people in the summer capital of Jammu-Kashmir state in India, police said. And in southern Kashmir, Indian and Pakistani forces traded mortar and small-arms fire across the disputed border -- a more intense version of what is a common occurrence even in calmer times.
Indian External Affairs Minister Jaswant Singh and Pakistani Foreign Minister Abdul Sattar shook hands, spoke amiably and smiled Wednesday in a conference room in Katmandu, Nepal, where a meeting of South Asian nations is convening.
"The ice is melting," Pakistani government spokesman Ashfaq Ahmad Gondal said after the Cabinet ministers of seven nations talked about economic development and then went to dinner together.
Pakistani President Gen. Pervez Musharraf and Indian Prime Minister Atal Bihari Vajpayee, are scheduled to join other leaders in Nepal Friday.
Singh has not specifically ruled out a meeting, though a Vajpayee spokesman said earlier that none were planned "at any level." Pakistan has said repeatedly it would be willing to meet with India and that tension should be defused through talks.
Sattar also suggested Pakistan would consider extraditing terrorism suspects if India met "legal requirements," The Nation newspaper reported Wednesday.
The South Asia Association for Regional Cooperation summit is pivotal because it offers the possibility of direct diplomatic contact between the two nations, which has been scarce of late. Last week, India sent home half of Pakistan's diplomats, and Pakistan responded in kind.
Tense relations worsened sharply after a Dec. 13 suicide attack on the Indian Parliament on Dec. 13 that killed 14 people. India said the attack was orchestrated by Lashkar-e-Tayyaba and Jaish-e-Mohammed, two Pakistani-backed militant groups fighting India's rule over two-thirds of Kashmir. Pakistan controls the rest of the Himalayan territory.
Pakistan denies the charges and says India's demands to arrest militants can be answered only if New Delhi backs up its accusations.
India has given Pakistan a list of 20 people it accuses of hijacking an Indian Airlines plane in 1999 to Kandahar, Afghanistan and attacking government targets in India in recent years. India says the suspects are in Pakistan and wants them handed over.
"If a court in India were to indict them, if India were to provide proof, Pakistan may consider extradition," Pakistani spokesman Gondal said Wednesday.
Still, in recent days Pakistan has acted to arrest dozens of militants, including the former leader of Lashkar-e-Tayyaba, though it cited internal security as the reason, not India's demands.
India is insisting Islamabad take what New Delhi calls "meaningful and resolute steps" to stop terrorists based in Pakistan from carrying out acts of violence in Kashmir, a mountainous region over which the two countries have fought two wars.
The attack Wednesday near the legislature in Srinagar came two months after an Oct. 1 suicide attack on the state legislature building, which killed 40 people.
Police said the attackers exploded the first grenade at the main entrance of the heavily guarded legislature building and followed up with another blast outside a nearby abandoned movie theater.
At least 12 people, including eight policemen, were wounded in the first blast. One policeman later died of his wounds, officials said. Ten civilians and three soldiers were wounded in the second explosion.
Mindful of the danger involved in a dispute between South Asia's only nuclear powers, the world has been paying attention.
China has expressed alarm, and U.S. officials have been on the phone almost daily with Musharraf and Vajpayee. British Prime Minister Tony Blair will visit Islamabad and New Delhi next week to discuss the tensions.
Security officials reported an intense exchange of fire in the Rawalakot and Bhimber sectors of Pakistani Kashmir, where villagers living near the frontier continue to relocate. More than 19,000 Pakistani Kashmiris have fled the border since mid-December.
"People are afraid and expect the intensity of fighting to rise," said Sardar Mohammed Zafeer, a resident of the border town of Abbaspur. He spoke to The Associated Press by telephone Wednesday morning.