The meeting on the sidelines of the 17th SAARC summit comes a week after Pakistan took a path-breaking decision to confer MFN status to India 16 years after it got a similar treatment from New Delhi and the return of the Indian Air Force's helicopter which had strayed into Pak-occupied Kashmir across the LoC last month.
The two prime ministers met in a beach cottage in Shangrilla resort along the Indian Ocean and discussed a whole range of issues, including the need for Islamabad to take action against the 26/11 perpetrators and build on the recent Pakistani decision to grant the MFN status to India.
Before the meeting, the two prime ministers shook hands and posed for photos. When the photographers pressed for a hand shake again Gilani responded "once more" and the two leaders shook again for the shutterbox.
This was followed by a brief delegation level talks after which the two leaders met separately.
The delegation members included external affairs minister S M Krishna, national security adviser Shivshankar Menon and foreign secretary Ranjan Mathai.
From the Pakistani side, foreign minister Hina Rabbani Khar, foreign secretary Salman Bashir and interior minister Rehman Malik were among those present.