India on Wednesday told Pakistan that it was committed to addressing all bilateral issues, including Kashmir, in a "sincere and purposeful manner".

During their talks, Prime Minister Manmohan Singh and his Pakistani counterpart Shaukat Aziz expressed satisfaction that the dialogue process was making progress, Foreign Secretary Shyam Saran said in New Delhi.

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The leaders had a restricted meeting for 45 minutes assisted by a few aides. This was followed by delegation-level talks extended over lunch at the Hyderabad House.

As the chairman of the South Asian Association for Regional Cooperation, Aziz invited the PM for the SAARC summit in Dhaka in January.

Both leaders agreed that SAARC was not living up to its potential.

Singh mentioned several proposals that India had put forward, which would come up for discussions in Dhaka. Among them was the poverty alleviation fund.

Another project involved a $10 billion infrastructure scheme for networking energy, communication and roads in SAARC countries other than India, Saran said.

Singh also mentioned the proposal for setting up of an economic council that would include finance ministers, commerce ministers and representatives of the planning commissions of the SAARC countries.

Another SAARC-related issue mentioned by India was the problem of HIV/AIDS and the efforts needed to tackle it.

Pooling of energy resources through a regional energy grid and the possibility of considering food security were also discussed, Saran said.