Both Indian and Pakistani officials seem hopeful about resolving differences over travel documents for passengers in the bus service connecting both sides of LoC.

New Delhi reportedly toyed with the idea of permitting the travel with local "rahdari" permit system prevalent till 1953 on both sides of Kashmir.

Pakistan opposes passport and visa as travel documents as it believes it would jeopardize its stand on Kashmir as a "disputed" territory.

But both sides also believe that early resumption of the bus service could give a major push to the Composite Dialogue process which was bogged down in the second round with little progress.

Earlier, India dropped its demand for visas, but wanted the passport as an identification document along with permit. But it now appears that New Delhi is willing to consider Pakistan's objections and look for more "innovative" solutions to iron out differences.

Officials here do not rule out an agreement between the two sides during Singh's visit.

Yet another positive development ahead of Singh's visit was India's decision to authorise its Petroleum Ministry to negotiate the Iran-India and Turkmenistan gas pipelines, de-linking from its earlier stand that the pipeline projects which pass through Pakistan should be part of overall opening up of economic and trade relations between the two countries.

While there is no word yet here on how Pakistan proposes to deal with reported reservations by the United States over the Iran gas pipeline, India's decision broadly complies with Pakistan stand that the pipelines are a stand-alone project not linked to other issues.

The US -- which considers Pakistan among its 'front-line' allies in its war on terrorism -- is involved in a serious row with Tehran over nuclear weapons issues.

Officials here said India has decided to leave the operational aspects of the pipeline to Tehran and Islamabad and work out a fixed delivery price, with Tehran bearing the overall responsibility to deliver the gas at India's doorstep.

Singh is expected to elaborate India's stand on this issue during his interaction with Pakistani leaders. Petroleum Minister Mani Shankar Aiyar is expected in Islamabad within the next weeks.

Officials here said that in their talks with Singh, Pakistani President Pervez Musharraf [Images], Prime Minister Shaukat Aziz and his counterpart Khurshid M. Kasuri were expected to engage him on a host of other issues including the progress on the eight point composite dialogue process and fixing new dates for SAARC summit.

The issue over Ahmedabad as venue for test and one day matches for the Pakistan cricket team tour to India beginning from Feb 25 is also expected to come up.