REPUBLIKA.CO.ID, KATHMANDU -- South Asian leaders signed an agreement to improve cross-border energy trade in the power-starved region Thursday, as a summit overshadowed by India and Pakistan's rivalry ended with little progress towards regional integration.

The prime minister of host country Nepal said the achievements of the South Asian Association for Regional Cooperation (SAARC) had fallen short, and urged fellow leaders to "summon the political will" to translate their words into action.

"Despite several transformative potentials in the region, our achievement stands short of expectations," said Sushil Koirala in a speech at the closing ceremony.

"We alone are responsible for shortcomings in the SAARC process."

The leaders of the eight SAARC countries had expressed frustration with the slow pace of progress towards greater regional integration since the group first launched nearly three decades ago.

Analysts have blamed SAARC's failure on the mutual mistrust between Pakistan and regional powerhouse India, which has taken a more assertive stance toward its neighbour since the election of a Hindu nationalist government in May.

India's new Prime Minister Narendra Modi made pointed references in his summit speech on Wednesday to the deadly 2008 attacks in Mumbai, which India blamed on Pakistani militants.

He also held formal talks on the two-day summit's sidelines with every SAARC leader except Pakistan Prime Minister Nawaz Sharif. Both sides said it was up to the other to request a meeting.

Nuclear-armed neighbours India and Pakistan have been bitter and sometimes bloody rivals since gaining independence from Britain in 1947, and have fought three wars.

The two countries' leaders shook hands in front of television cameras at the closing ceremony, both grinning warmly.

But the failure to sign two other proposed pacts, on road and rail connectivity, was seen as an indication of the group's limitations.

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