Talks between Pakistani and Indian officials aimed at resolving a lingering territorial dispute that has hindered exploration of oil and gas and led to the arrests of fishermen from both sides were set to continue Saturday. The talks on the Sir Creek - a strip of marshland that flows into the Arabian Sea between Pakistan's southern Sindh province and India's western Gujarat state_ are part of a peace process and warming of relations between the two nuclear-armed neighbors that began in 2004. The talks began Friday in a "cordial and friendly atmosphere," the Defense Ministry said in a statement. The Pakistani negotiators were led by Maj. Gen. Jamil-ur-Rahman Afridi, surveyor general of Pakistan, while chief naval officer Rear Admiral B.R. Rao was leading the Indian delegation, the statement said. Sir Creek is one of eight contentious and unresolved issues between Pakistan and India - including the disputed Himalayan region of Kashmir - that Islamabad and New Delhi have been discussing as part of a peace dialogue.