New Delhi: "Indian and Chinese officials started a fresh round of talks Wednesday aimed at working to resolve a decades-old border dispute," the Indian foreign ministry said.

The two-day talks are being led by India s National Security Adviser M. K Narayanan and Chinese Vice-Premier Dai Bingguo, both appointed special representatives to address the issue in June 2003.

"The two officials will conclude the talks Thursday," a foreign ministry official said.

A formal statement was expected to be made at the end of the talks.

The meeting comes after Foreign Minister Pranab Mukherjee said on Tuesday the country s relations with its neighbours including China and Pakistan "are poised for a positive transformation.

New Delhi says Beijing occupies 38,000 square kilometres (14,670 square miles) of Indian territory in the disputed region of Kashmir, illegally ceded to it by Pakistan in the 1950s.

Beijing, in turn, claims 90,000 square kilometres in the Indian-administered Arunachal Pradesh. The dispute led to a brief war in 1962.

A formal ceasefire line was never established after the war but the border has remained mostly peaceful after agreements were signed in 1993 and 1996.

Last year, the Asian neighbours reopened a historic Silk Route mountain pass to revive direct trade.

Indian Prime Minister Manmohan Singh said this week he will visit China in the second half of this year to improve bilateral relations.

China s Hu Jintao visited New Delhi in November in the first trip by a Chinese President in 10 years. The two sides then said resolving the border row was a key priority.