Thimphu: The Prime Ministers of India and Pakistan will hold a bilateral meeting in Thimphu on Thursday during which the Indian side is expected to convey its unhappiness over the lack of “credible" action by Islamabad to punish perpetrators of 26/11 and end cross-border terrorism.

Prime Minister Manmohan Singh and his Pakistani counterpart Yousuf Raza Gilani will hold the meeting on the sidelines of the 16th Saarc Summit, spokesperson for the Ministry of Foreign Affairs Vishnu Prakash said in Thimphu.

“It has been agreed through diplomatic channels that Prime Ministers of India and Pakistan will hold a bilateral meeting tomorrow at Thimphu," Prakash told reporters, ending the suspense over an Indo-Pak meeting.

This will be the two leaders’ first bilateral engagement since they met in Sharm-el-Sheikh in July last year.

Though he said nothing about the time of meeting, government sources earlier said the meeting will take place on Thursday evening.

Singh and Gilani had last met for substantive discussions in Sharm-el-Sheikh in July last year. They had two brief encounters earlier this month in Washington where both the Prime Ministers were to attend the Nuclear Security Summit.

During the meeting, Singh is expected to focus on India’s “core" concern of cross-border terrorism and highlight unhappiness that Pakistan has not done enough on this front.

Singh is expected to seek an update on the investigations and trial in the Mumbai attacks case in Pakistan, government sources said.

He is likely to point out that the threat of terrorism emanating from Pakistan continues to loom and Pakistan had not taken any concrete steps to eradicate this to create conditions for resumption of substantive dialogue.

Pakistan has arrested seven of those accused in the Mumbai terror strikes but India maintains it is not enough as the mastermind of the attacks -- Jamaat-ud-Dawa chief Hafiz Saeed -- was still free and engaging publicly in vitriolic tirade against India.

Singh had underlined a few days back that several of the “conspirators", including Hafiz Saeed, were still roaming about freely and rejected Pakistan’s contention that there was not enough evidence to act against him.

The Pakistani side, on the other hand, is expected to raise the issue of water sharing.

Pakistan has been alleging that India was violating the Indus Water Treaty of 1960 by building a power project on Kishanganga river in Jammu and Kashmir, a contention rejected by India.