Pakistan has agreed to host an Indian delegation probing the 2008 Mumbai attacks, in a major step towards cooperation in the fight against terrorism.
Officials from both countries also agreed to establish a terror hotline Tuesday, following two days of bilateral talks in the Indian capital, New Delhi.
The two sides issued a joint statement saying Indian Home Secretary G.K. Pillai and Pakistan's Interior Secretary Chaudhary Qamar Zaman agreed to set up a hotline to to share real-time information on terrorist threats.
Pakistan also agreed "in principle" to allow a team from India to investigate the Mumbai attacks, during which Pakistan-based militants killed 166 people. A Pakistani delegation would also travel to India to probe the attacks. Dates for the visits were to be decided in four to six weeks.
India also shared information on a 2007 train bombing that killed more than 60 people, mostly Pakistanis.
The talks were the first formal dialogue since the Mumbai attacks, which stalled the peace process. Nuclear-armed India and Pakistan have fought three wars since their 1947 independence from Britain.
The meeting wrapped up a day before a highly-anticipated World Cup semifinal cricket match between India and Pakistan in the northern Indian city of Mohali.
Pakistani Prime Minister Yousuf Raza Gilani has accepted an invitation from his Indian counterpart, Manmohan Singh, to attend the match. He told the Pakistani Cabinet on Monday that the match and the talks preceding it are a way for the two countries to show the world that they "can play together as well as sit and deliberate together."
So-called "cricket diplomacy" has been used as a platform to ease India-Pakistan relations in the past. In 1987 and 2005, Pakistani leaders traveled to India to watch cricket matches.
India has stepped up security throughout Mohali and surrounding areas in the state of Punjab. Tickets for the semifinal match have been sold out for days. Most businesses and offices in both countries are expected to be closed Wednesday as cricket fans from the rival nations watch the match.