Islamabad, Pakistan ? India and Pakistan agreed Tuesday to start formal peace talks next month, ending more than two years of confrontation between the nuclear-armed neighbors that almost exploded into all-out war.

Details such as precisely when and where the talks would begin, and who would open the negotiations, still must be worked out. But India accepted Pakistan’s long-standing demand that all bilateral issues — and not just the dispute over the Himalayan territory of Kashmir — be on the table.

Pakistani President Pervez Musharraf called the deal an historic breakthrough that he hopes will finally resolve a 56-year dispute over Kashmir, which is divided between India and Pakistan. The region has been wracked by guerrilla war and terrorist attacks since separatists began fighting Indian rule in the area in 1989.

“There are no winners and losers here,” Musharraf said. “I think the victory is for the world, for all the peace-loving people of the world.”

Hopes for lasting peace between India and Pakistan have been raised, and dashed, by successive leaders for decades, so it is anyone’s guess whether Musharraf and Indian Prime Minister Atal Bihari Vajpayee will succeed this time around.

But both say they are driven by the desire of ordinary citizens in South Asia to end old conflicts so that money can be spent on reducing the world’s largest population of poor people instead of building up armies. The Sept. 11, 2001, terrorist attacks against the United States and the subsequent war in Afghanistan also put foreign pressure on India and Pakistan to resolve the conflict over Kashmir, a key battleground for Islamic extremists and militants linked to the al-Qaida terrorist network.

Relations between India and Pakistan have suffered sudden, often violent, mood swings since Britain divided the subcontinent and granted the two countries independence in 1947. They have fought three wars since then, two of them over Kashmir.

Indian Prime Minister Atal Bihari Vajpayee, right, hugs Pakistani Prime Minister Zafarullah Khan Jamali before Vajpayee boarded the plane to leave Pakistan, at Islamabad, Pakistan. India and Pakistan agreed Tuesday to start talks next month on core disputes of nationalism and religion.