The decision to hold joint exercises comes as a follow up of two countries claiming 'substantial and satisfactory' progress in discussions on joint services issue.
Pakistan said demilitarisation in Kashmir would improve the atmosphere and conditions for the Kashmiris, who he alleged are subjected to continuous intimidation by Indian security forces.
The prime minister will arrive in Islamabad on Saturday to attend the South Asian Association for Regional Cooperation summit.
'The struggle of insurgents and pro-independence political activists is fuelled by a deep conviction that not only is a free Balochistan possible, but they also believe that Pakistan will inevitably break apart, leading to Balochistan's independence.'
Foreign Secretary Shyam Saran firmly ruled out any change in borders.
The two countries will also revive after 16 years the Joint Commission under which cooperation in the fields of trade, energy, telecom, security, visa and consular access to detained nationals of the respective countries will be covered.
The meeting of the working group on cross-Line of Control CBMs, earlier scheduled to be held on July 10, was postponed as Joint Secretary T C A Raghavan, who was to lead the Indian delegation, rushed to the Afghan capital after the suicide attack on the Indian embassy there on Monday last that killed 58 people.
"We have to look out of the box... we have to look at innovative ways of resolution (to the Kashmir issue). We have our minds open to such issues," Pakistan Foreign Minister Shah Mahmood Qureshi said on Friday while delivering a lecture at the Brookings Institution.
Despite the recent confidence-building measures between India and Pakistan, infiltration of militants into Jammu and Kashmir is continuing and militant infrastructure in Pakistan is intact, a senior army officer said in Srinagar on Sunday.
With the issue of pre-notification on missile tests high on agenda, India and Pakistan held their third round of expert-level talks on nuclear confidence-building measures (CBMs) in New Delhi on Friday.
Militant infrastructure across the Line of Control in Pakistan-occupied Kashmir is intact, and that is evident from the recent infiltration bids in Uri sector of Baramulla district, the army said on Friday.
It will be Putin's first participation in a multilateral summit after a mercenary group launched a short-lived armed rebellion last week that rocked Moscow.
He said Pakistan and India would have to show sincerity.
2007 will be remembered as one of the most turbulent years in Pakistan's history, with unprecedented public protests and judicial activism prompting Musharraf to proclaim emergency ahead of parliamentary polls.
These officers will oversee the entire poll processes as eyes and ears of the commission on the ground to ensure free, fair and voter-friendly elections.
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The two sides agreed to continue dialogue to find a peaceful negotiated settlement of all bilateral issues including Jammu and Kashmir.
The talks will continue tomorrow when the two sides would discuss the Kashmir issue.
The Union defence minister, however, said India wanted to strengthen its "good" relations with Pakistan.
India and China have agreed to maintain peace and tranquillity in the border areas which was a "pre-requisite" for continued growth of bilateral relations as also to enhance cooperation in key areas, including counter-terrorism, maritime security and civil nuclear energy sector.
The FMR allows people residing close to the India-Myanmar border to venture 16 km into each other's territory without any documents.
"I am going to propose the holding of such manoeuvres," Singh, also chairman, Chiefs of Staff Committee of the Indian Armed Forces, said on the eve of his departure for Beijing on a week-long visit as the head of a tri-service delegation.
Mehbooba was addressing a joint press conference with Omar Abdullah and Hurriyat Conference Chief Mirwaiz Umer Farooq on the sidelines of the Hindustan Times Summit.
The group on CBMs favoured opening of new cross-LoC routes to increase frequency of bus services which, at present, is confined to Srinagar-Muzaffarabad and Poonch-Rawalkot.
The two countries already have a bus service from Srinagar to Muzaffarabad.
