The leaders of Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka were to meet for the 13th South Asian Association for Regional Cooperation (SAARC) summit in Dhaka on Saturday and Sunday.

The foreign ministers, who were still finalising the summit agenda Friday, also hoped to reach an accord on combating terrorism, in addition to implementing a South Asian Free Trade Agreement (SAFTA).

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

The meeting of foreign ministers also discussed setting up of a new economic body to take regional integration beyond SAFTA, an Indian official present at the discussions told AFP.

"The ministers have made an ambitious recommendation -- the setting up of a high economic council comprising ministers of planning and finance and their senior officials," he said, speaking on condition of anonymity.

The council would aim to push regional integration forward to include "trade in services, enhanced investment and harmonising of customs union and, beyond that, a South Asian Economic Union," said the official.

The foreign secretaries on Thursday also agreed to set up a regional disaster preparedness centre in the Indian captial, a decision expected to be endorsed by the summit.

The agreement to set up a free trade area was signed at the grouping's last 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 the delegations had agreed to implement SAFTA on time and would work to resolve all outstanding issues by the end of November.

"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 Kathmandu in late November.

A Bangladeshi official said earlier that ending the deadlock would require a "meeting of minds at the highest level," but other 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.

Sri Lankan Foreign Minister Anura Bandaranaike said the talks had been delayed by the postponement of the 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 and added that "we still hope to launch the system by January or early next year."

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

Critics have dismissed it as a talking shop and say that the grouping failed to fulfil its promise in 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 for the people of South Asia.

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