New Delhi, June 23: India and Pakistan have both won in the just-concluded second round of dialogue, by identifying issues of mutual concern such as peace and security, including confidence-building measures, and Jammu and Kashmir, on top of the agenda.

Even though both these issues will be dealt with at the foreign secretary-level, Kashmir is only one of the issues in the eight-point agenda evolved at the end of three days of talks, and certainly not the ``core'' issue around which Pakistan has wanted the others to revolve. The general tenor of the joint statement issued from Islamabad this morning points to the more measured hand of Pakistan's Prime Minister Nawaz Sharif that has played this round, rather than his combative foreign minister Gohar Ayub Khan.

Highly placed sources in the Ministry of External Affairs feel that by the time the third round takes place in New Delhi in September, both sides would have got enough of a breather to mark progress on these subjects as well as on the six others.

The other issues are, Siachen, Wullar barrage project/Tulbul navigation project, Sir Creek, terrorism and drug-trafficking, economic and commercial cooperation, and promotion of friendly exchanges in various fields.

The sources feel that establishing a working group on Kashmir would serve to squarely position the views that both countries have held since the 1972 Shimla accord, which in fact acknowledges that this is a ``dispute'' between India and Pakistan.

By September, which marks the approximate end of summer as well as the time when the passes in Kashmir begin to close, New Delhi will be able to see how well Islamabad keeps its word on withdrawing support to terrorism in the Valley.

Significantly, Pakistan's foreign secretary Shamshad Ahmad did not even mention the phrase `Jammu and Kashmir' in his four-paragraph press statement from Islamabad this morning, which is being seen here as a huge change from the mid-May Male summit, when it was referred to as the ``core'' dispute between the two countries.

The topmost issue on the agenda is peace and security, including confidence-building measures. The fact that this generic term, rather than the emotive `nuclear issues' has been used in the joint statement, means that Pakistan is willing to acquiesce to New Delhi's old demand that discussions on nuclear and missile capabilities in both countries be restricted to the bilateral level.

Confidence-building measures are sought to be enhanced on the ground and military level. If terrorism goes down and Jammu and Kashmir Chief Minister Farooq Abdullah is seen to better control the situation in his State, New Delhi will be able to give its own Army a breather by thinning its troops in the Valley.

If that happens, it will serve to strengthen Sharif's hand in Pakistan: one major demand in that country is that India reduce troop levels in Kashmir.India also seems to have won the round on delinking Siachen from the issue of Jammu and Kashmir, and it is believed that an agreement on the lines of what was being discussed in late 1992 may once again be on the cards. The Pakistanis have long held that Siachen is an inextricable part of the dispute in India's northern-most state.

Interestingly, terrorism and drug trafficking is a separate agenda item, thereby supporting New Delhi's thesis that Pakistan-sponsored terrorism is not restricted to the Kashmir Valley, but also substantially exists in Punjab and even in Rajasthan.

Economic ties is also a stated part of the agenda, an issue on which both Islamabad and New Delhi want to see significant progress. Pakistan, in fact, showed eagerness on enhancing overland trade during these talks, asking India to streamline facilities at the Wagah border.

Ultimately, of course, both sides acknowledge that only political will can really break the bilateral ice, but it is hoped that the working groups will enable both sides to get their teeth into the identified disputes rather than up the ante with rhetoric.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.