THIMPHU (Reuters) - The foreign ministers of India and Pakistan signalled on Tuesday that their prime ministers would talk this week, a meeting seen as crucial for resuming a peace dialogue and preventing further deterioration in ties.
India halted peace talks with Pakistan after the November 2008 Mumbai attacks in which 166 people were killed and which India has blamed on Pakistan-based militant groups.
"Why not, one always lives in hope," Pakistan Foreign Minister Shah Mehmood Qureshi said when asked if the two prime ministers would hold talks on the sidelines of a regional summit in Bhutan this week.
"I think talking and engaging is the most sensible way forward."
Foreign Minister S.M. Krishna also hinted that a meeting between Prime Minister Manmohan Singh and his Pakistani counterpart Yousaf Raza Gilani was likely to take place over the next two days.
"It will depend up on what time the prime minister arrives. Let us look forward to it," he said. Singh arrives on Wednesday morning and will stay in the Bhutanese capital until Friday morning. Indian officials say there is a comfortable window of opportunity for a meeting.
The move came on a day India arrested a junior diplomat posted at its high commission in Islamabad on charges of spying for Pakistan, something that could embarrass New Delhi but was unlikely to affect any chances of talks between the two nations.
"The official is cooperating with our investigations and inquiries," foreign ministry spokesman Vishnu Prakash said.
A meeting between Singh and Gilani is seen as crucial because it would help keep engagement alive between the two nuclear-armed neighbours who have a long tradition of hostility.
The two countries' battle for influence in Afghanistan also has a direct bearing on Western efforts to stabilise a region with 1.8 billion people.
Although Singh and Gilani briefly exchanged pleasantries in Washington this month, a meeting in Thimpu would be their first substantial contact since controversial talks in Egypt in July when the two agreed to delink terrorism from the broader peace process halted by India after the attacks in Mumbai.
That move was slammed by Indian opposition leaders as diluting India's stand that peace talks could only resume when Pakistan acted against the planners of the attack.
The top diplomats of the two countries met in New Delhi in February this year but failed to achieve a breakthrough. That meeting, nonetheless, was seen as a small step towards repairing ties.
The United States has been urging the two sides to reduce tension so that Pakistan can focus on fighting the Taliban on its western border with Afghanistan.
Editing by Alistair Scrutton