Visiting Foreign Minister Natwar Singh is leading the Indian side at the talks with his Pakistani counterpart Khurshid Kasuri, foreign office officials said.

Singh also met President Pervez Musharraf at his Army House residence in Rawalpindi before the joint commission meeting. Details of the meeting were not immediately available.

Senior Indian diplomat Shyam Saran said the commission would discuss steps to promote trade ties between the nuclear-armed neighbours, who have fought three wars, two of them over the Himalayan region of Kashmir.

"This will be the first meeting of the joint commission after a gap of 16 years. This is a very significant event for our two countries," Saran told reporters late Monday.

"Our trade and economic relations are improving," he said, noting that Pakistan recently used their land border to import basic foods including onions, garlic and potatoes from India.

The decision on the economic commission was reached Monday when Singh held talks with Kasuri to review progress on the peace process.

The two countries have also made some progress at talks on withdrawing troops from the Siachen glacier in Kashmir, a Pakistani foreign office spokesman said, but he rejected reports that a deal was imminent.

"There is some progress but I cannot say they are very close" to signing an accord, foreign office spokesman Naeem Khan told AFP. "There are ideas that have been exchanged and there is some progress."

Indian newspapers reported a pact was near on withdrawing soldiers from the 6,300-metre (21,000-foot) glacier, where experts say cold and avalanches have killed many more troops than hostile fire.

The Hindustan Times said the deal was done and the wording was being worked out, while the Indian Express said talks went on into the night to thrash out the differences on Siachen and Sir Creek.