May 21 (Bloomberg) -- India and Pakistan reported progress today in normalizing relations after their first high-level talks since Pakistan's election of a civilian government.

A two-day visit by Indian External Affairs Minister Pranab Mukherjee yielded no breakthrough in the countries' disputes over the Himalayan region of Kashmir or on border issues. The rivals' main accomplishment was an accord giving each government consular access to its citizens held in the other country's prisons, according to Mukherjee and Pakistani Foreign Minister Shah Mahmood Qureshi.

The visit marked the first talks between senior officials of South Asia's biggest military powers in 14 months. The previous round was canceled because of the political turmoil that forced President Pervez Musharraf to end military rule by resigning as army chief.

Two years after the nuclear-armed rivals came close to war in 2002, Musharraf began the normalization process with Indian Prime Minister Manmohan Singh. Musharraf's political decline left many Indians wondering whether his civilian successors would continue it.

Mukherjee said his main aim was to ``establish my contacts'' with the ruling coalition that emerged from elections in February and that has largely displaced Musharraf in power. ``I found a strong willingness and desire'' by the coalition's leaders to pursue the normalization process, which Musharraf launched with Indian Prime Minister Manmohan Singh.

Coalition Unraveling

Mukherjee arrived just as the seven-week-old coalition has been unraveling, with the decision by its second-largest party to pull out of the cabinet. Analysts such as former Indian ambassador to Pakistan, G. Parthasarathy, say instability in Pakistan's government narrowed the prospects for reaching any major agreements.

The Indian delegation met Musharraf and Prime Minister Yusuf Raza Gillani, and Asif Ali Zardari, leader of the Pakistan Peoples Party, which heads the coalition.

They also met former Prime Minister Nawaz Sharif, who pulled his Pakistan Muslim League out of the coalition this month. Sharif insists that Zardari reinstate Supreme Court judges who may challenge Musharraf's right to stay in office.

Pakistani and Indian officials stressed that the talks had been friendly and laid groundwork for further progress soon. ``We made a lot of progress in the talks and we hope to continue it in the next round, which is to be in mid-July,'' Qureshi said in a news conference with Mukherjee.

According to a joint statement, this week's discussions included disputes at opposite ends of the Indian-Pakistani frontier -- at Sir Creek, on the Arabian Sea, and on the three- mile-high Siachen Glacier, which abuts China in the Karakoram mountain range.

Kashmir Bus Service

While Mukherjee said the two countries should focus on improving economic cooperation, Qureshi repeated Pakistan's decades-old insistence that a resolution of the Kashmir dispute is necessary for a stable peace. The governments did agree today to increase the bus service between the two sides of Kashmir, which has been divided since 1947.

In that year, as Britain ended colonial rule in the Indian subcontinent, the territory divided into the states of Hindu- dominated India and Muslim Pakistan. They immediately fought a war to control Kashmir, and more warfare followed in 1965, 1971 and 1999.

In 1989, Kashmiris on the Indian side rebelled, demanding either independence or accession to Pakistan. That violence has continued since, killing about 50,000 people. Pakistan has supported insurgents in Kashmir, although it denies periodic Indian accusations that it infiltrates guerrillas to the Indian side.

In this week's talks, Indian officials say, they complained about what they said were two gun-battles this month across the cease-fire line that divides the Indian- and Pakistani-ruled sides of Kashmir. Pakistan has denied there was any ``unprovoked firing.''

To contact the reporter on this story: James Rupert in Islamabad at jrupert3@bloomberg.net.

Last Updated: May 21, 2008 11:06 EDT