The India-Pakistan border skirmishes along the disputed Kashmir have cast dark shadows over the SAARC Summit in Kathmandu.
The bickering spilled into the two-day SAARC summit, as the two arch enemies who fought three inconclusive wars, refused to meet.
Embarrassed host Nepalese Prime Minister Shushil Koirala attempted a last-ditch effort to rescue the two-day talks, which is threatened to be a flop after Pakistan refused to agree to key agreements proposed by India and other nations.
Breaking the two-day ice, Prime Minister Narendra Modi shook hands with his Pakistani counterpart Nawaz Sharif as the two leaders met briefly during a retreat at picturesque holiday resort at Dhulikhel on Thursday, the concluding day of the two-day regional summit.
It is being widely reported that Koirala eased the much strong tension between Modi and Sharif which ended up with Modi and Sharif exchanging pleasantries.
After a brief pause, Pakistan and Indian troops yesterday traded fresh fire along the disputed Kashmir Line of Control (LoC).
Long faces of both the leaders of two nuclear-armed rivals were reflected from their body language, as they did not smile, nor exchanged pleasantries on the inaugural day of the Summit.
Hostilities between neighbours India and Pakistan threatened to ruin efforts by South Asian leaders to boost trade among almost a quarter of the world's people, throwing into doubt any prospect of a regional customs union.
Pakistan's refusal to sign three multilateral pacts with the eight members of SAARC has also further pushed the regional conference into uncertainty of its future cooperation. But at the last moment finally the SAARC Framework Agreement on Energy Cooperation Agreement was signed by 8-nations without any fuss.
Trade between the SAARC nations - Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka - has grown from under $140 million in 2008 to $878 million in 2012, according to SAARC figures.
But it still accounts for less than five per cent of the region's total commerce, according to the Washington-based Brookings Institution. By contrast, trade between East Asian nations accounts for nearly 35 per cent of that region's total.
Almost all the leaders at the summit expressed dismay at SAARC'S sparse achievements since it was founded 29 years ago aiming like the Arab Emirates and European-style unions.
Modi warned that the regional integration would happen 'through SAARC or outside it,' if the grouping failed to agree on the pacts, despite Bangladesh and Nepal equally eager for a greater regional cooperation on trade, connectivity and electric sharing.
But the mistrust between India and Pakistan - widely seen as the main obstacle to greater South Asian integration - is unlikely to be resolved so easily.
SAARC Summit fails to sting out India and Pakistan differences, officials close to the summit remarked.