Buddhist monks and Bhutanese dancers in traditional costumes performed a ceremonial flag hoisting ceremony as the leaders of India, Pakistan, Nepal, Bangladesh, Sri Lanka, Maldives and Afghanistan watched.
However, a meeting between Indian Prime Minister Manmohan Singh and his Pakistani counterpart, Yusuf Raza Gilani, earlier in the day, stole the limelight from the SAARC event. The two leaders held, quote "very good and positive" talks and asked their officials to take steps as soon as possible to normalize ties.
The two sides' animosity has undermined greater regional cooperation, an agenda that was the founding principle of the eight-nation bloc of SAARC.
Relations between the two south Asian neighbors went into a diplomatic freeze after India blamed Pakistan-based militants for the Mumbai attacks in November 2008.
Bhutanese Prime Minister Jigme Y. Thinley declared the summit close with a pledge to improve regional cooperation, understanding and trust during his chairmanship for the next two years.
The next summit will be held in the island nation of the Maldives.
While SAARC summits are often little more than a backdrop to bilateral meetings between India and Pakistan, the bloc has tried to push forward cooperation in trade and commerce.
This time the eight countries signed agreements on trade and services that will boost regional collaboration in health, hospitality, communications and computer and information services.
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