The leaders of Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka were to hold the 13th SAARC summit in the Bangladesh capital on Saturday and Sunday.

The foreign ministers were to finalise the summit agenda. In addition to free trade, agreements were also expected on combating terrrorism.

A decision by SAARC foreign secretaries on Thursday to set up a regional disaster preparedness centre in the Indian captial New Delhi was also due to be endorsed.

The South Asian Free Trade Agreement (SAFTA) was signed at the last SAARC summit in Islamabad in January 2004 with January 1, 2006 set as a deadline for implementation.

But negotiations have since stumbled over a sensitive list of products, rules of origin and a compensation mechanism for the least developed countries.

India's junior foreign minister E. Ahamed said late Thursday that delegations had agreed to implement SAFTA on time and would work to resolve all outstanding issues by the end of November to maintain the timetable.

"There will be a clear message from SAARC leaders that any pending issues must be resolved by the end of November by the Committee of Experts," he said.

The committee is due to meet in the Nepalese capital Kathmandu in late November.

A Bangladeshi official said earlier that ending the deadlock on the three sticking points would require a "meeting of minds at the highest level", but other SAARC ministers said they were confident of an on-time implementation.

"Though there are some outstanding issues like rules of origin, the SAFTA can be launched in due time," Pakistan's Foreign Minister Khurshid Mahmud Kasuri told reporters.

"We will suggest concerned experts to expedite the process so that the SAFTA could be launched in due time," he added.

The SAFTA deal would create the world's biggest free trade area and is seen as key to the founding SAARC objective of poverty alleviation in a region that is home to 1.4 billion people, including 60 percent of the world's poor.

Sri Lankan Foreign Minister Anura Bandaranaike said the negotiations had been delayed by the postponement of the SAARC summit due to last year's Asian tsunami which battered his country, the Maldives and India.

But he said the outstanding issues could be resolved -- with the right initiatives.

"We still hope to launch the system by January or early next year," he said.

SAARC was founded in Dhaka in 1985 with the aim of reducing poverty and fostering amity, peace and stability.

Critics, however, have dismissed it as a "talking shop" and say that the grouping failed to fulfil its promise due to two decades of regional squabbling and mistrust.

Bangladesh Foreign Minister M. Morshed Khan has said he hopes the Dhaka summit will mark a new chapter in SAARC's history and see it begin to deliver results to the 1.4 billion people of south Asia.

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