Indian and Pakistani leaders Wednesday night held wide-ranging discussions and both pledged to resolve their differences.

The discussions between Indian Prime Minister Manmohan Singh and Pakistani Premier Yousuf Raja Gilani was held in the northern Indian city of Mohali where they watched a cricket World Cup semi-final between the two arch-rivals.

"Whatever be the differences between our two countries we have to find pathways to resolve them and Gilani and I have had extensive discussion on all outstanding issues and we have reaffirmed our resolves that there're difficulties but we'll make very honest effort to overcome those difficulties," Singh told reporters after having dinner with Gilani post-match early Thursday morning.

"The two countries should be working together to find cooperative solutions and need permanent reconciliation to live together in dignity and honor. We should put our ancient animosities behind us to attend to the problems of our nations," he said.

"And the message from Mohali is that the people of India and Pakistan want to live in peace and amity and that the two PMs have committed their governments to work in that direction," he added.

Gilani said in response: "He (Singh) wants to work for peace and prosperity in the region. We are both committed to this and we want the environment to improve so that we can serve the people."

The Indian and the Pakistani premiers held "wide-ranging conversations, not talks" on a number of issues of relevance to the bilateral relations, Indian Foreign Secretary Nirupama Rao later told the media.

The Foreign Secretary said both leaders reaffirmed the intention to take the dialogue process forward as they agreed that it was important to "understand each other better, ...resolve outstanding issues and at the core of the dialogue is the goal to normalize relations, pervasive and more permanent normalization process in an uninterrupted manner".

However, Rao said: "We haven't put Nov. 26, 2008 (Mumbai terror attacks) on the backburner. Prime Minister has said there should be an atmosphere free of terror if we want genuine normalization of relations."

India has been insisting that Pakistan bring the perpetrators of the Mumbai terror attacks to justice and given Pakistan several dossiers containing evidence against those responsible for the massacre in which over 170 people were killed by Pakistani militants.

India and Pakistan ended Home Secretary-level talks in New Delhi on Tuesday with an agreement to set up a hotline on terror and allow an Indian commission to probe the 2008 Mumbai attacks in Pakistan.

It was the first official talks after the 2008 Mumbai attacks derailed the dialogue process between the two countries.