The 13th South Asian Association for Regional Cooperation summit opened in Dhaka on Saturday amidst tight security.
With the summit, the seven-member grouping founded in Dhaka in 1985 stepped into its third decade.
Pakistan Prime Minister Shaukat Aziz was in the chair before handing over the grouping's leadership to host Prime Minister Khaleda Zia as all the leaders took their seats on a white flower bedecked podium.
The leaders also observed a minute's silence in memory of victims of the recent earthquake in India and Pakistan as well as last year's tsunami in several south and south-east Asian countries.
Among the dignitaries were the foreign ministers, senior officials and spouses of the seven leaders. Former Bangladesh President Hussain Muhammad Ershad who hosted the first founding summit in 1985 was also present.
The main Bangladesh opposition leader and Awami League party chief Sheikh Hasina Wajed stayed away from the event.
More than 30,000 security personnel are deployed to ensure a smooth two-day summit. The next summit will be in India.
SAARC groups India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka and the Maldives.
Earlier, the South Asian leaders went to nearby Savar district and placed wreaths at a memorial dedicated to the martyrs of the Bangladesh's 1971 Independence War, besides offering prayers at the Dhaka grave of slain Bangladeshi president Zia ur Rahman, the brainchild of SAARC. Premier Khaleda Zia is his widow.