India's oldest rebel group on Friday held their first formal peace talks with the government, laying out proposals for an autonomous ethnic region in northeast Assam state, but within the Indian union.

A seven-member team of the United Liberation Front of Asom (ULFA), which announced a unilateral ceasefire in July, handed over a 12-point charter of demands to Indian Home Minister P. Chidambaram during the talks in New Delhi.

"We are sticking to our original demand of sovereignty for our people but we are not seeking secession from India," Sasha Choudhary, one of the ULFA delegates, told a news conference after the talks.

"That is the basis of the ULFA's struggle," he said, adding that their demands included eviction of hundreds of thousands of settlers in oil-rich Assam, which adjoins Bangladesh and Bhutan.

"Our demands include illegal migration, its ill-effects and required remedies including the sealing of international borders" with Assam, the charter, signed by ULFA chairman Arabinda Rajkhowa, said.

A second round of talks will be held soon after India's independence day on August 15.

Rajkhowa was arrested in Bangladesh in 2009 and handed over to the Indian authorities. He was released on bail at the end of 2010 as part of the nascent peace process.

Assam Chief Minister Tarun Gogoi, who attended the meeting, said he hoped the talks would lead to a "permanent solution" to the ethnic violence of the past.

"I am confident the two sides will be able to hammer out a permanent solution to the insurgency problem. Both sides are being flexible in their approach, which is a good sign," Gogoi told AFP.

ULFA, the largest separatist outfit in Assam, has been fighting for a homeland for ethnic Assamese since 1979.

The insurgency has claimed an estimated 10,000 lives.

The ULFA leadership has held several rounds of informal talks with New Delhi's chief negotiator P.C. Haldar since Rajkhowa's release from prison.

They also held a courtesy meeting with Prime Minister Manmohan Singh.

The only hold-out to the peace process is ULFA's military commander-in-chief Paresh Baruah, who is believed to be hiding with around 100 armed cadres somewhere along the Myanmar-China border.

The ULFA leadership used to operate out of Bangladesh's capital Dhaka, but the movement was severely weakened by a 2009 crackdown by the Bangladeshi authorities, under pressure from India.

"We are also demanding the right to engage in specific relationships with foreign countries for promotion of mutual trade and commerce," Choudhary added.

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