Pakistan and Iran are holding three-day talks in Islamabad on the multi-billion dollar Iran-Pakistan-India gas pipeline project though India is not participating in the parleys as differences on some key issues remain to be settled.

Senior officials of the two countries on Tuesday began talks on the 2,700-km pipeline project that is expected to be completed in three years at a cost of $ 7 billion.

A total of 750 km of the pipeline will pass through Pakistan and it will carry gas from Iran's South Pars fields.

The two countries are likely to settle some technical issues ahead of the ministerial-level talks on the project, to be held in October or November, media reports said on Wednesday.

The ongoing talks are a follow-up to the technical talks held in Tehran last month, which were also not attended by India.

The head of the National Gas Exports Company Nasrullah Saifi is leading the Iranian side at the talks while the Pakistani team is being led by S Hasan Nawab, a senior petroleum ministry official.

Indian officials told PTI that New Delhi wants the transit fee payable to Pakistan for using its territory for transporting the gas, to be resolved first.

Reports have said that India would hold a meeting with Pakistan to resolve differences over the transit fee.

This was also indicated by India's Petroleum Minister Murli Deora at a meeting of a parliamentary committee last week.

At last month's meeting, Iran and Pakistan said they would press ahead with the pipeline project even without India's participation.

Islamabad is seeking $0.493 per MMBtu as transit fee while India has offered $0.20 per MMBtu.