Officials from both sides have downplayed expectations about a major breakthrough on the issue of Kashmir -- the disputed Himalayan territory at the heart of two wars between Pakistan and India.
Instead, both capitals have described today's talks as a "courtesy call" on the sidelines of a summit of the South Asian Association for Regional Cooperation (SAARC).
But Pakistani Information Minister Sheikh Rashid says the contentious issue of Kashmir was discussed at the meeting, the first between Musharraf and Vajpayee since 2002 when their countries were at the brink of war.
Rashid says today's 65-minute meeting also focused on the issues of cross-border terrorism and how to push forward with a bilateral dialogue.
Just minutes before he met with Musharraf, Vajpayee stressed the importance of a continuing dialogue between the two countries. "It is necessary that the two countries [of India and Pakistan] have adequate representation and that dialogue goes on continuously -- that we understand each other's difficulties and find a way out together," he said.
For his part, Musharraf told heads of state at the Islamabad summit yesterday that the entire region of South Asia would benefit from a resolution to the decades-old disputes between India and Pakistan. "Elimination of the root causes of tension and peaceful resolution of our disputes and differences are essential steps towards embracing the vision of a cohesive and integrated South Asia to which we all subscribe and we all yearn for," he said.
But Musharraf also warned that failure to move toward a resolution on Kashmir will bode ill for the region. "The bitter truth is that [the South Asian Association for Regional Cooperation] will never achieve its full potential unless the disputes and tensions that draw us apart are resolved peacefully with justice and with equity," he said. "There can be no development in the absence of peace. There can be no peace so long as political issues and disputes continue to fester."
Although both Musharraf and Vajpayee are talking about Kashmir, initial indications suggest both sides remain entrenched in their positions. Vajpayee yesterday defended the status quo by insisting that Indian rule is legitimate.
"It is obvious that we need time to proceed with the talks. There should be a continuous process for dialogue. We have never avoided talk on the issue of Jammu and Kashmir. It is our belief, and correct belief, that Jammu and Kashmir is a part of India. But we are ready to talk about it openly. I think there has not been a solid discussion on this question. The world has been saying that we must get together and resolve the issue among ourselves. This will take time," Vajpayee said.
Pakistan's Foreign Ministry spokesman, Masood Khan, reiterated the view from Islamabad that the majority Muslim population of Indian-ruled Kashmir should have the right to self-determination. "If we have consensus, we have a formula for resolution," Khan said. "But let me tell you that as far as Pakistan is concerned, our position is very clear, and we think that the aspirations of the people of Jammu and Kashmir must be ascertained and respected."
In Pakistan's southern port city of Karachi, where there is strong support for an end to Indian rule in Kashmir, residents are expressing hopes for warmer ties. One Karachi resident told Reuters that events on the sidelines of the SAARC summit in Islamabad have raised those hopes: "As a result of a successful SAARC summit, chances of peace will be bright and this terrorism and whatever is happening [will decrease]. Everyone wants peace and better business conditions. Economic conditions will improve in the country as a result of improved business conditions and, God willing, the [nuclear] arms race [with India] will come to an end."
Across the border in the Indian city of Ahmedabad, Muslim residents like Hassan Ahmed say they also hope the dispute over Kashmir will be resolved soon. "It is good that the bitterness between the two countries is ending and they are moving ahead," he said. "It is good for us. It is good for our future."
But Muslim political and religious leaders on both sides of the border still appear to back the positions of their respective governments.
Syed Shah Fazle Rahman, head cleric of the Jama Mosque in Ahmedabad, suggests there is no need for the Muslims of Kashmir to gain independence from Indian rule. "This is an opportunity for the entire world, and especially for our country, because many [violent events] have happened recently that should not have happened," he said. "The only thing that has kept people of both countries apart is the issue of Kashmir and its independence. I want to ask what this 'independence' is and what it is for. We are among the 1.8 million Muslims living in India. Aren't we independent? And now the people of Kashmir are talking of freedom from Indian rule? I have always been against this."
But Abdul Majee Malik, president of the Karachi-based Jammu and Kashmir Liberation League, says any dialogue on Kashmir ultimately should convince New Delhi to drop its claims on the region. "After a long time, two heads of government have met together in Islamabad, and I think it is a very good beginning," he said. "Let us hope that Mr. Vajpayee will discuss the Kashmir issue and it ultimately will be settled -- and these words are given a practical meaning and finally he'll come to the conclusion that the people of Jammu and Kashmir will not have accepted the hegemony and the rule of India. They should be given their right of self-determination as promised by India and the international community."
Today's talks are the culmination of peace overtures that have been made by both Musharraf and Vajpayee since the Indian prime minister last April extended a "hand of friendship" to Islamabad.
Musharraf in recent weeks has dropped Pakistan's decades-old demand for a referendum in Kashmir. The Pakistani government also has implemented a cease-fire along the 1,000-kilometer "line of control" that divides Kashmir. That cease-fire has held since November.
Some experts say India's main demand -- for Islamabad to crack down on cross-border terrorism -- could be boosted by two failed assassination attempts against Musharraf in the past month.
Both attacks have been blamed on Islamic militants based in Pakistan -- including those that New Delhi alleges are responsible for cross-border attacks into India and Indian-ruled Kashmir.
Analysts conclude that Musharraf has a better chance of clamping down on terrorist and rebel bases inside Pakistan if there is progress toward a lasting peace settlement with India.