Indian External Affairs Secretary Shyam Saran announced this while briefing journalists on the outcome of the Saarc Council of Ministers meeting that ended in Dhaka yesterday.

Saran termed the two-day meeting "very successful and substantive."

He said the Council of Ministers has decided to organise Saarc Car Rally in the run-up to the 14th summit. An organising committee will be formed with representatives from the member states to select routes and arrange fund and other things for the rally.

The Saarc Council of Ministers and Standing Committee would meet before the 14th summit in New Delhi, Saran said speaking at the press briefing at Dhaka Sheraton Hotel.

During the two-day meeting in Dhaka, the Council of Ministers endorsed India's proposal to set up South Asian University, Saarc Museum of Textiles and Handcrafts, and a Telemedicine Network connecting the member states, Saran said.

He said the proposed South Asian University will be a centre of excellence bringing together the bright minds of South Asia and beyond.

The Council of Ministers has also endorsed the modalities of Saarc Development Fund (SDF) to be set with an initial capital of $300 million. India has already pledged $100 million to be spent under the SDF for poverty alleviation, Saran said.

The other member countries will also contribute to the SDF. Besides, there is provision to collect fund from international financial institutions.

About the India-Pakistan trade disputes over the Safta (South Asian Free Trade Area) framework, Saran said the Council of Ministers has referred the matter to Safta Ministerial Council (SMC) to settle the problem before the next summit.

He hoped the SMC meeting will be convened as early as possible to resolve the problem.

Asked when the Indo-Pak peace talks will resume, Saran said he had discussion with Pakistan Foreign Secretary Riaz Mohammad Khan in Dhaka on August 31 and the Pakistan side agreed that the peace process is important for the people of both the countries.

"This is not a stalemate...it's ongoing dialogue. We will remain in touch," he said without giving any indication of date or time for the next round of the meeting with Pakistan.

Replying to a question about the Mumbai blast, he said India provided Pakistan with evidence of terror linkage in the past. India wants Pakistan to take necessary actions against the Islamic militant groups to fulfil its commitment to fight terrorist outfits, he added.

Senior officials of the Indian external affairs ministry and the high commission of India in Dhaka were present at the press conference.