Aziz optimistic of lasting peace
 |  Aziz (left) and Singh wave to the media after meeting in New Delhi. |
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 Pakistan's prime minister visits India in an effort to cement diplomatic gains between the two nations.
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NEW DELHI, India (CNN) -- Pakistani Prime Minister Shaukat Aziz says he is optimistic about achieving sustainable peace with India but has stressed that settling the thorny issue of Kashmir remains the key.
Aziz spoke on Wednesday after concluding talks with his counterpart in New Delhi, Indian Prime Minister Manmohan Singh.
Aziz said peace talks between the two nations would continue on a range of issues.
While no solid proposals emerged from the Aziz's first visit to India, progress was made on improving transport links and communications between Indians and Pakistanis living in Kashmir.
In particular, the prospect of opening up a land route between the Pakistan-controlled city of Muzaffarabad and Indian-controlled Srinagar was discussed.
But Aziz said the two sides had not yet resolved a row over what travel documents Kashmiris would use to travel on a proposed bus service linking the two capitals.
Kashmiris have been urging both sides to resolve their differences and start the bus services that would to help reunite divided families.
The region has been at the root of the enmity between India and Pakistan since both were carved out of British colonial India in 1947.
"This is a very good step if this bus service starts because we will be able to meet our relatives. And the people who have the culture as ours. It will also boost the trade," said Mohammad Shahid, a student in Kashmir's main city Srinagar, whose maternal family lives on the other side of the military cease-fire line dividing Kashmir.
"We are very happy that India and Pakistan are holding talks but by just opening the bus service between Muzaffarabad and Srinagar, it will not resolve ties. The Kashmir issue has to be resolved completely," said Shafiq Hussain, another resident.
However, Aziz's assertion that progress on other issues need to be tandem with the issue of Jammu and Kashmir, has left many Kashmiris disappointed that matters would be back to square one sooner than later.
But other analysts call the latest meetings a positive move, and say that despite there being no firm propsals emerging, it was enough that the two sides were talking and that they were continuing to talk.
"After nearly half a century of acrimony and tensions, Pakistan-India relations are now at a historic crossroads," Aziz said in a speech to Indian business leaders.
"If India takes a step forward, Pakistan will respond by two," Aziz said. "Let us both prove the pundits of gloom and doom wrong."
Formal talks between the two nations begin next month on the disputed region of Kashmir.
Aziz met various factions from the Indian-controlled part of Kashmir ahead of his meeting with Prime Minister Singh.
According to the Indian Express newspaper, the separatists want to be included in talks on Kashmir, the region at the center of five decades of dispute between the two nuclear-armed South Asian powers.
The factions, which range from militant Muslims to non-violent political alliances, are pro-Islamabad, but are often divided by disunity and differences.
India accuses Pakistan of supporting the separatists and militants, which Islamabad denies.
Aziz arrived in New Delhi on Tuesday for a visit in his capacity as the chairman of a South Asian regional body.
The fledgling peace process between the two nations has received a boost in recent days, with India announcing a pullout of thousands of its troops from Kashmir.
