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KATHMANDU, Aug 21 (AFP) - Indian Foreign Minister Yashwant Sinha and Pakistan's deputy foreign minister Inamul Haq on Wednesday exchanged a handshake shortly after the inaugural session of a regional meeting here.

Sinha and Haq are in the Nepalese capital Kathmandu for the annual South Asian Association for Regional Cooperation (SAARC) Foreign Ministers' meet.

When asked if he would be meeting Haq for talks, Sinha merely said "We are meeting all the time."

India has ruled out any formal talks with Pakistan unless Islamabad stops what it calls "cross-border terrorism" in the disputed Himalayan region of Kashmir.

Dialogue has stalled for about a year, with tensions between the two nuclear rivals spiralling after an Islamic militant attack on India's parliament complex last December by gunmen New Delhi claims were sponsored by Islamabad -- a claim it rejects.

That attack resulted in the massing of tens of thousands of troops on their borders, triggering international fears of a nuclear conflict.

India accuses Pakistan of arming, funding and training Islamic militants battling New Delhi's rule in Indian Kashmir, a charge Islamabad denies.

More than 36,500 people have died in Indian Kashmir since the beginning of the Muslim insurgency in 1989.

SAARC, formed in 1985, groups Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. 

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