India and Pakistan yesterday failed to agree a joint declaration yesterday after talks broke down between the two nuclear powers over the disputed northern state of Kashmir to which both lay claim.
"There were difficulties with some clauses over Kashmir and negotiations have ended," a senior Pakistani official said in Agra, the city of the Taj Mahal, 140 miles east of New Delhi where two days of talks took place between the Indian Prime Minister, Mr Atal Behrai Vajpayee, and the Pakistani President Gen Pervez Musharraf.
"President Musharraf has decided to return home. The president is leaving without a declaration," the Pakistan government spokesman, Mr Anwar Mahmood, said.
Gen Musharraf paid an extended courtesy call on Mr Vajpayee, in a last minute effort to rescue the summit before he left Agra for home, nearly 12 hours behind schedule, but again failed to achieve a breakthrough.
Earlier he cancelled his pilgrimage to the shrine of a Sufi Muslim saint in Ajmer in western Rajasthan state, 300 miles from Agra for extended meetings with Mr Vajpayee.
Both sides are blaming the other for the failure to produce a declaration after three drafts were drawn up before being rejected.
Emissaries flitted between the Amar Vilas palace hotel where Gen Musharraf was staying and Mr Vajpayee's J P Palace hotel two miles away, in a bid to finalise the declaration.
Official sources said the talks broke down after Pakistan turned down India's proposal to agree to a commitment to end cross-border terrorism in Kashmir.
Islamabad denies fuelling the 12-year Muslim insurgency in Kashmir that has claimed over 30,000 lives.
India refused to accede to Pakistan's demand to include a clause in the declaration relating to "ascertaining" the will of the Kashmiri people in deciding their fate, a course Delhi has opposed for over half a century.
"Positions will harden on either side and both will need diplomatic maturity to navigate the future," Kanti Bajpai, an international expert said.
The neighbours have fought three wars over Kashmir since independence in 1947 and India has strongly opposed a UN-sponsored plebiscite it agreed to hold after Pakistan occupied a third of the state 54 years ago.
Analysts said India was also upset by being diplomatically outmanoeuvred by Gen Musharraf during his closed-door breakfast meeting with editors in the morning which was surprisingly and mysteriously televised nationwide.
"The public should be told that the main issue between Pakistan and India is Kashmir," Gen Musharraf said.
"Kashmir is the main issue . . . and I will carry on saying it because this is what we have killed each other for," the general added.
Diplomats admitted Gen Musharraf's candid remarks put India's Hindu-nationalist coalition on the defensive.
Security officials said the failure of the summit would lead to a fresh outbreak of violence in Kashmir by Pakistan-backed insurgents where nearly 50 people died in attacks by militants yesterday.
This raises to over 100 the number of people killed during the summit which began on Saturday.
India's official spokeperson said that "though the commencement of a process and the beginning of a journey with Pakistan had taken place, the destination of an agreed joint statement had not been reached".