Hopes for a breakthrough in South Asia were dashed this week, when the summit between Indian Prime Minister Atal Behari Vajpayee and Pakistani President Pervez Musharraf broke off without an agreement. A peace accord was always beyond reach. But there were signs during the three-day meeting that the two leaders might be able to sign a document that would establish a foundation for future talks. Instead, Mr Musharraf returned home empty-handed. The effort was not wasted, however. The two men proved that they could discuss the issues that divide their countries. Necessity may yet drive them to strike a deal that is so clearly in both their national interests.

The mere fact that the two leaders were meeting provided grounds for hope. Summits between the two countries have been rare; the last attempt was in February 1999, and the hope it created evaporated three months later when separatist guerrillas, with Pakistan's support, seized territory on India's side of the Line of Control that divides the two nations in the disputed province of Kashmir. India had refused to talk to Mr. Musharraf, whom it accused of masterminding the invasion. Subsequent efforts to engage the separatists directly failed, however, forcing Mr. Vajpayee to try instead to talk with Mr. Musharraf.

Hopes rose as both men made conciliatory gestures during the summit and then extended their meeting by a day to hammer out an agreement. Those efforts failed at the last minute. Reportedly, the two leaders agreed on the broad outline of a document, but failed, as always, to nail down specifics on the critical issue of Kashmir. India wants Pakistan to rein in the separatists -- which Islamabad denies it supports.

Nonetheless, progress has been made. Mr. Vajpayee had demanded that Kashmir not monopolize the discussions, and Mr. Musharraf conceded that it is only one of a number of important issues -- there are plenty of other pressing agenda items for the two men to discuss. Reportedly, the failed agreement was to have included nuclear confidence-building measures, efforts to expand economic ties and a regular consultative mechanism, in addition to recognition of the centrality of the Kashmir dispute to their relations.

Those terms will be implemented in part anyway, despite the failure to reach an agreement this week. And the two leaders will meet again. Mr. Vajpayee accepted an invitation to return Mr. Musharraf's visit later this year, and the two men are likely to get together in New York at the annual opening meeting of the United Nations General Assembly in September.

Economic ties will increase if India goes ahead with plans to build a natural gas pipeline from Iran. The preferred route would go overland, through Pakistan. India fears that would render the country vulnerable to Islamabad. But the revenues Islamabad would earn from transit fees -- reportedly $250 million to $600 million a year -- would give it a stake in seeing that the gas keeps flowing. Better still would be building a power plant that would supply electricity to both countries.

Both countries need peace. The geopolitical environment in South Asia has changed in recent years. A key element has been the shift in views in Washington, which now sees Delhi as a potential diplomatic partner in the region. That unnerves Pakistan, which has traditionally enjoyed U.S. support. But India and Pakistan have their own reasons for reaching an agreement. "Hot peace" between the two capitals frustrates Indian plans to play a still larger role in regional affairs and to stake a claim to a permanent seat at the United Nations Security Council. Pakistan's economy has been declining since 1995; uncertainty about the country's future is the chief culprit. Mr. Musharraf promised to fix the economy, end corruption and restore real democracy when he seized power in October 1999. Real progress toward a peace agreement would help him achieve all three goals.

As representatives of hardline elements in their countries, the two leaders are well-positioned to implement a deal. Mr. Musharraf, a former general, can deliver the military, which is essential to an agreement to cut support to the separatists. Mr. Vajpayee's coalition is led by nationalist Hindu organizations, which have been most adamant on the Kashmir issue.

Thus, despite this week's failure, there are still grounds for hope. As one Pakistan official noted, "there is understanding and there is positive movement." Unfortunately, the violence continued even as the two leaders made their tentative progress. Eighty-six people were killed during the summit. Sadly, that mounting death toll seems to impart no urgency to the peace progress.