The three-day summit starts in Islamabad today.

While a regional free trade pact -- which could lift commerce among member states from 4.0 to 60 percent of their total external trade -- tops the official agenda, all eyes will be on the forum's two giants.

The South Asian Association for Regional Cooperation (Saarc) summit offers a key chance for its giants India and Pakistan to meet for the first time since near war in 2002 and propel an eight-month peace process.

The summit is also being seen as an opportunity to revive the 18-year-old forum thanks to thawing India-Pakistan ties, to which it has been hostage most of its life.

The nuclear rivals were on the brink of war at the last Saarc summit in Kathmandu two years ago. Ongoing tensions triggered the cancellation of the 2003 summit in Islamabad.

The seven nations of Saarc -- Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka -- make up one of the world's most populous and poorest regions.

India's Foreign Minister Yashwant Sinha declared the 12th Saarc summit would be "exceptionally successful and historic" after foreign ministers finalised the free trade and anti-terrorism agreements plus a social charter.

He said they augured well for bilateral India-Pakistan ties.

The pacts are ready to be approved by heads of government during the meet.

"We have been able to adopt all the agendas," his Pakistani counterpart Khurshid Mahmud Kasuri told reporters yesterday at the conclusion of the two days of pre-summit talks by foreign ministers.

Under a massive security net involving 10,000 police and paramilitary officers, a network of checkpoints and sealed off roads, and soldiers manning anti-aircraft guns in hills above Islamabad, Saarc heads of state began arriving for Sunday's opening.

The prime ministers of Bhutan and Nepal, Surya Bahadur Thapa and Bhutan Prime Minister Lyonpo Jigme Yaeser Thinley were the first to fly in at around 9.30 am (0430 GMT) yesterday.

Vajpayee arrived later on a special flight from New Delhi in his first visit to Pakistan since his famous peace-bid bus journey to Lahore in 1999.

The South Asia Free Trade Agreement (Safta) agreement is due to come in force from January 1 2006 to establish a free trade zone in the region.

Under the framework Saarc countries would reduce tariffs to between 0 and 5.0 percent, from between 25 percent and 30 percent.

Business leaders hope it will raise inter-Saarc trade from four or five percent of their total trade output to 60 percent.