"No breakthrough is expected during this high-level meeting", which is likely to take place in the next two months, she said.
But it would serve as a strong base to move ahead to establish a good relationship, said Rao, who met Pakistani journalists in New Delhi days before her meeting in Thimphu with her counterpart Salman Bashir on the margins of a SAARC committee conference there in early February.
"I cannot promise you any breakthrough during FM-level talks, however, I`m sure things would move ahead," she was quoted as saying by Pakistani newspapers.
Indo-Pak composite dialogue has been stalled since the 2008 Mumbai attacks carried out by Pakistan-based Lashkar-e-Taiba terrorist outfit. New Delhi has been insisting that Pakistan should demonstrate that it was serious by bringing to book the perpetrators of the 26/11 attacks.
India has noted that people like LeT founder Hafiz Saeed, who is the mastermind of the Mumbai attacks, were roaming freely in Pakistan and indulging in anti-India rhetoric.
Referring to the 26/11 attacks, Rao said it was unfortunate that Pakistan was delaying the process to bring the perpetrators to justice.
"It`s an issue that is very much a part of what we want to speak to Pakistan about," she said.
India is mindful of compulsions of the Zardari government in Pakistan on its efforts against the masterminds behind the Mumbai attacks but is expecting speedy results, Rao said.
"Who knows the situation better than us? We are your neighbours. But the government has to move against forces of extremism and terrorism," she said.
About speculation that the SAARC meeting in Thimphu will yield some good news for India and Pakistan, she said, "one has to be sober about expectations."
She said the Indian government was serious about dialogue with Pakistan but it wanted some action against perpetrators of the Mumbai attacks in order to move ahead.
Thimphu "is not a photo opportunity for us," Rao was quoted as saying by the Pakistani newspapers.
Replying to a question, she said both India and Pakistan understand that they can only defeat terrorists by adopting a collective approach.
She said India understands Pakistan`s position in current scenario and that New Delhi is ready to help Pakistan defeat militants and extremists.
Replying to another question, Rao admitted that there is a trust deficit between India and Pakistan and that the leadership of both neighbouring countries will have to address it on priority basis.
She said the welfare of millions of people living across the borders should be the common agenda of both India and Pakistan.
To another question, Rao said India wants to see a peaceful, stable, energy-secure and prosperous Pakistan that acts as a bulwark against terrorism for its own sake and for the good of the region.
She emphasised that there can be no better strategic restraint regime than greater economic and commercial integration; more and more people-to-people contacts and cultural exchanges, which lead to mutual understanding of each other`s views.
On India`s role in Afghanistan, Rao said her country has a direct interest in the war-torn, not because it sees it as a theatre of rivalry with Pakistan but because of its historical relationship with Afghanistan.
She said India`s USD 1.3 billion assistance to Afghanistan has helped build vital civil infrastructure and develop human resources and capacity in areas of education, health, agriculture and rural development.