Bangladesh and India agreed Tuesday to cooperate in trade and to resolve border disputes, but left river water sharing and transit issues for further discussions.
The two countries signed a number of agreements, including a protocol to deal with conservation of the Sundarbans, the world's largest mangrove forest, and its endangered tigers. The two South Asian nations share the Sundarbans.
They also decided to demarcate disputed border areas and increase cooperation in the fields of fisheries and renewable energy.
The agreements came during a meeting of Indian Prime Minister Manmohan Singh and Bangladeshi Prime Minister Sheikh Hasina. Singh and Hasina are working to reach agreement on their disputed 2,545-mile (4,096-kilometer) border.
However, a hoped-for deal on sharing water from the River Teesta flowing between their countries was not signed because of last-minute objections from the Indian state of West Bengal.
This is an issue Bangladesh hoped to resolve during Singh's visit.
Meanwhile, Bangladesh asked for delays in dealing with transit questions.
"We want to go slow over the transit issues and take some more time as we need to solve the issue of sharing water of common rivers," a government official with the knowledge of the negotiations told The Associated Press.
But both the leaders were optimistic as Singh said the issue of common rivers "need not be sources of discord".
"We have decided to continue discussions to reach a mutually acceptable, fair and amicable arrangement for the sharing of the Teesta and Feni river waters," Singh said in his statement after the meeting with Hasina.
Hasina also reciprocated.
"During our discussions today we have been able to make considerable progress. I am happy to announce that we have moved closer to resolving long pending issues of common concern," Hasina said in her statement.
Singh is returning a visit by Hasina to India in January last year during which India granted Muslim-majority Bangladesh a $1 billion development loan and raised quotas on imports of textiles.
India helped Bangladesh secede from Pakistan in a 1971 war. However, relations soured after a 1975 military coup in Bangladesh when independence leader Sheikh Mujibur Rahman, Hasina's father, was assassinated and a new government took over.
The chief ministers of four Indian states bordering Bangladesh are accompanying Singh but Mamata Banerjee, the newly elected chief minister of West Bengal, canceled her trip over reported disputes with the central government over the water-sharing plan.