New York - The leaders of India and Pakistan agreed to jump-start peace talks with new discussions planned between the nuclear-armed neighbours before the end of the year.

Indian Prime Minister Manmohan Singh and Pakistani President Asif Ali Zardari, who took office this month, came to the decision when they met Wednesday night in New York on the sidelines of the UN General Assembly.

The agreement came at a time of heightened tension between India and Pakistan. India blamed Pakistan for being behind a July blast at its embassy in Kabul, which killed 58 people, and of violating a ceasefire by firing over the Line of Control, their de-facto border that divides Kashmir.

Islamabad has denied any role in the Kabul blast.

The neighbours have fought three wars, two of them over the disputed Kashmir region. They launched their peace talks, called the composite dialogue, in 2004 to resolve outstanding disputes relating to their border and Kashmir.

Several "confidence-building measures" have been taken since then to improve strained relations, including opening road and rail links, but no headway has been made toward settling the decades-old Kashmir dispute.

However, they did decide this week to start bilateral trade between the parts of Kashmir they separately administer by as early as next month.

India and Pakistan launched the fifth round of the composite dialogue in July. (dpa)