Pakistan Foreign Secretary Sohail Mahmood and Inter-Services Intelligence (ISI) chief Lt Gen Faiz Hameed on Monday met Afghan National Security Adviser Hamdullah Mohib in Kabul, Dawn news reported.
Spokesman for the Afghan National Security Council Kabir Haqmal confirmed the meeting to reporters in Kabul and said the two sides discussed ways of normalising relations.
The agenda of talks, according to sources, included the dispute over an Afghan market in Peshawar, border firing incidents and mutual allegations of harassment of diplomats.
The Afghan government had last month protested over a police raid on the market in Peshawar following an ownership dispute over the property. Kabul had then also closed its consulate in Peshawar.
The Pakistan government has been contending that the dispute over the market was between a private citizen and an Afghan bank and that a court had decided the litigation in the matter in favour of the private citizen in 1998. The local administration, it was said, undertook the enforcement action after the Afghan bank had exhausted all legal remedies.
Kabir Haqmal said the two sides in their talks in Kabul had decided to set up a committee to resolve the market dispute.
Pakistan and Afghan troops had clashed a fortnight ago after the Afghan side used force to stop construction of a border post by the Pakistan Army. The clashes had continued for a few days during which Afghan forces targeted civilian population on the Pakistani side of the border in Chitral, leaving several people, including soldiers, injured.
Most lately, both sides accused each other of harassing their diplomats. The Afghan Foreign Ministry initially alleged that its Ambassador in Islamabad Atif Mashal was summoned by the ISI and conduct of "the entity's personnel" was in "contradiction with diplomatic norms and principles".
The Pakistan government later claimed that officers and staff of the Pakistan Embassy in Kabul were "obstructed on the road and the Embassy vehicles were also hit by motorcycles while going towards the Embassy". In the meantime, the consular section of the Pakistan Embassy in Kabul suspended its services.
The Foreign Office had further denied that the Afghan ambassador was mistreated.
( With inputs from IANS )