Pakistan and India Wednesday agreed on boosting cooperation to fight terrorism, which remains a major challenge for the two nuclear-armed South Asian neighbours, impeding normalization of their strained bilateral relations, according to dpa. The mutual resolve came in a delegation-level meeting led by Indian External Affairs Minister Pranab Mukherjee and his Pakistani counterpart Shah Mehmood Qureshi, as they reviewed the progress in the fourth round of peace talks between the two countries launched in 2004. "We have decided that the terrorism, a menace that we jointly face, has to be fought out. We have a joint mechanism to tackle it and we will move forward by activating it, so that such incidents (of terrorism) do not effect our relations," said Qureshi in a joint press conference with Mukherjee following the meeting. "We will start the next round of peace talks in July but before that a meeting of the Joint Anti-Terrorism Mechanism will be held in June," he added. Pakistani President Pervez Musharraf and Indian Prime Minister Manmohan Singh put in place an anti-terror mechanism in a Havana summit in November 2006, five months after the peace process was halted following Mumbai's commuter train bombings that killed more than 180 people. New Delhi then suspected the involvement of Pakistan-based terrorists, towards whom it believes Islamabad had a policy of looking the other way instead of controlling. Previously, Pakistan had supported the militants based in the Pakistan-controlled part of Kashmir, the disputed Himalayan region to which the two countries lay their claim, in carrying out operations in India. But since the 9/11 attacks, Musharraf's regime has revised its policy. Pakistan has itself recently been hit by growing militancy with a string of suicide attacks launched by pro-Taliban militants in tribal regions bordering Afghanistan. More than 1,000 people, including former prime minister Benazir Bhutto whose party now leads the new government, have been killed over the last 14 months in these assaults, prompting India not to point the finger at Pakistan when the Indian city of Jaipur was struck by a string of bombings last week that killed at least 63 people. The Indian minister said creating "an atmosphere free from terrorism and violence" was the top priority in the peace process. He arrived on Tuesday in Islamabad to conclude the review of the fourth round delayed last year due to the political crisis in Pakistan over the removal of chief justice Iftikhar Chaudhry by Musharraf. The political backers of the embattled president were thrashed in February 18 elections and some degree of political stability was restored in the country, paving the way for the resumption of peace dialogue with India. However, Mukherjee's visit was overshadowed by recent Indian claims about Pakistan's repeated violation of a four-year-old ceasefire at the virtual border that divides Kashmir between the two countries. "You have to recognize the fact that the situation has improved on both sides of the border whether it is ceasefire - or infiltration," Qureshi insisted. Besides terrorism, the slow-moving peace process includes some easily agreeable issues, including the issue of prisoners languishing in each other's prisons. Islamabad on Tuesday announced the release of 97 Indian prisoners detained in several jails as a "goodwill gesture," leading to the signing of a Memorandum of Understanding on Wednesday under which the sides will provide consular access to each other's citizens apprehended on the other side of the border. But the peace dialogue is mainly dominated by the issue of Kashmir. Qureshi hailed the progress made on some trivial issues but lamented that the core issue still remained to be resolved. "If we want to continue the peace process - then we will have to make significant progress on the issues of Jammu and Kashmir which are an important part of this dialogue," he warned. On the other hand, the visiting minister emphasized putting aside the border issues and concentrating on expanding "the base of the mutual trade between the two countries" to improve the economic conditions in the region. Earlier, Mukherjee met Pakistan's President Musharraf and Prime Minister Yousaf Raza Gilani separately. Gilani told Mukherjee that India, Pakistan and the Kashmiri people "must show courage, leadership, magnanimity, flexibility and a passion for peace" to find a lasting solution to the problem of Kashmir.