New Delhi, Jul 27 (IANS): Indian External Affairs Minister S.M. Krishna Wednesday said he looked forward to forging "a peaceful and cooperative relationship" with Pakistan and underlined the need for a terror-free atmosphere in South Asia as he sat down for talks with his Pakistani counterpart Hina Rabbani Khar.

After their talks, Krishna and Khar, who arrived here Tuesday on a two-day visit, are expected to unveil a host of confidence-building measures (CBMs) across the divided halves of Kashmir.

All issues, including terrorism and the Kashmir issue, will figure in the discussions, sources said.

Welcoming Khar to India, Krishna said: "I look forward to working closely with her in forging a peaceful and cooperative relationship between India and Pakistan, which is in the interest of peace and development of both our countries, the region and beyond."

"We owe this to ourselves and to the generations to follow," he said. Krishna also reiterated India's desire to "see a stable, peaceful and prosperous Pakistan" and stressed that the "challenges and aspirations of all us South Asians are similar."

"I visualize a resurgent South Asia, proudly marching forth on a path of development, in a terror free and harmonious atmosphere," he said.

Khar, Pakistan's youngest and first woman foreign minister, also struck a positive tone. "We come here with a positive outlook," she said while calling for "good, friendly relations" between the two countries. Khar also exhorted the two countries to work for peace, prosperity and stability in the region.

Krishna is expected to press Pakistan for speedy justice for victims of the 26/11 Mumbai carnage and raise the issue of Pakistani intelligence agency ISI's link with Kashmiri separatism. He is also expected to emphasise the need for "an atmosphere free from terror" to continue meaningful talks.

Ahead of the talks, Foreign Secretary Nirupama Rao and her Pakistani counterpart Salman Bashir had Tuesday finalised a slew of CBMs designed to expand travel and trade across the divided halves of Kashmir. The CBMs could include an increase in the frequency of cross-Kashmir bus links between Srinagar and Muzaffarabad and Poonch and Rawalakot, an increase in the number of trading days across the Line of Control (LoC) from two to four, the opening of more trading points and multiple entry permit for six months for the people of Jammu and Kashmir.

These CBMs are expected to be announced later in the day after the Krishna-Khar talks.

The two sides may also announce the release on humanitarian grounds of prisoners in each other's custody.