NEW DELHI, Aug 31 (Reuters) - India and Pakistan have failed to resolve a dispute over India's plans to build a dam on a river in its side of Kashmir, the countries said on Friday after two days of talks, but said they would continue negotiations.

India started building the dam in the mid-1980s to help make the Jhelum river navigable throughout the year, but had to suspend work after Pakistan complained that the Jhelum's currents would be slowed in its territory, and that the work violated a water sharing pact.

State officials from both countries have met several times in recent years to discuss what India calls the Tulbul Navigation Project and what Pakistan refers to as the Wullar Barrage.

"The two sides further discussed their respective positions on the project and had a better appreciation of each other's views," the countries said in a joint statement.

Talks would continue soon, it said.

The inconclusive outcome mirrors the slow progress made by the nuclear-armed neighbours since peace talks began in 2004, with the core dispute being over the Himalayan region of Kashmir.

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