Indian Prime Minister Manmohan Singh and his Pakistani counterpart Yousuf Raza Gilani are scheduled to hold talks on the sidelines of a regional summit in Bhutan Thursday raising hopes of a thaw in relations, according to dpa. India broke off four-year-long talks between the two countries after a terrorist attack in Mumbai in 2008 which it blamed on a Pakistan-based militant group. Top foreign ministry officials of the nuclear-armed South Asian neighbours, which have a history of bitter relations, met in New Delhi in February after a gap of 15 months but that meeting led to little progress in resuming the stalled dialogue. The composite dialogue had covered several contentious issues between the two nations, including the dispute over the Kashmir region, differences over border demarcation and sharing of river waters. While Pakistan has been keen on resuming the dialogue, India insists that Islamabad first take action against those it believes were responsible for the Mumbai attack that left 166 dead. Both countries have been under pressure from the United States to resume talks as their differences are seen to impact Pakistan's efforts to fight terrorism. "We have encouraged India and Pakistan that they need to restore a high-level dialogue that they have had in the not-too-distant past," US State Department spokesman Philip J Crowly said Wednesday. US Assistant Secretary of State Robert Blake is attending the two-day summit of the South Asian Association of Regional Cooperation (SAARC) in Bhutan's capital Thimphu as an observer. Analysts say not much is expected from Thursday's talks between Singh and Gilani, but the high-level meeting could mark a way forward. Singh is expected to again raise India's concern over terrorist networks operating against India from Pakistan soil and to seek details of Islamabad's actions against the Mumbai suspects, state-run Doordarshan television channel reported citing diplomatic sources. Seven men are currently on trial in Pakistan in connection with the Mumbai attack. Gilani is expected to raise the issue of resumption of the dialogue, Pakistan's Foreign Ministry spokesman Abdul Bashit said Wednesday. The two leaders are likely to meet after the closed session of the leaders of the SAARC nations that include Afghanistan, Nepal, Bhutan, Sri Lanka, Bangladesh and the Maldives. The SAARC was formed in 1985 with the aim of accelerating regional development, but it has been overshadowed by the rivalry between India and Pakistan. India and Pakistan have fought three wars since their independence from British rule in 1947, two of them over the disputed Kashmir region.