After the 15-minute meeting at the Prime Minister's residence, 56-year-old Mehbooba told reporters it was "very positive" and "good" in addressing issues pertaining to the people of the state and that she was "very satisfied".
The meeting took place a day after Mehbooba arrived here barely three days after she had returned to the Kashmir Valley after her talks with BJP President Amit Shah had hit a road block.
"We are seeing a stalemate for last two to three months over government formation in the state but today I am satisfied. I am very satisfied," she said and announced that the party's future course of action would be announced at the PDP legislature party meeting this Thursday.
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Asked about the Modi-Mehbooba meeting, Union Minister Prakash Javadekar said at a BJP briefing it was "constructive and good".
A BJP source said the alliance government in the state could be in place in the next one week.
Mehbooba will be flying back to Srinagar tomorrow where she will brief her party legislators on Thursday. "I had been authorised by the party MLAs to take a decision. I have convened a meeting on Thursday and after that we will announce the future course of action."
Sources in the PDP said that after the legislative party meeting, the two sides would meet for government formation and giving final touches to the cabinet which will be headed by Mehbooba, the first woman Chief Minister of the state.
Last Thursday, BJP's chief interlocutor Ram Madhav had announced that his party would not be accepting any fresh demands from its erstwhile ally PDP and put the ball in their court while stressing that his party would respect the 'Agenda of Alliance' document.
"If she had to surrender herself in this fashion, why were the people of Jammu and Kashmir deprived of an elected government for last three months," he said.
Another spokesperson of the National Conference Sarah Hayat Shah tweeted "so much drama and suddenly Mehbooba says the meeting with the PM was very positive. What about the CBMs, AFSPA, the power projects?"
State Congress Chief G A Mir termed the demand for more Confidence Building Measures (CBMs) by PDP ahead of government formation as a drama and said Mehbooba owes an explanation to the people of the state as to why she was instrumental in imposition of two-and-a-half month Governor's rule in the state.
Mehbooba came to Delhi yesterday after PDP made it clear to BJP that there was some miscommunication and no fresh demands had been raised by the party for stitching an alliance.
This is her second visit to the national capital in five days after her talks with BJP President Amit Shah on Thursday failed to make any headway triggering speculation that the two parties could be making renewed efforts to reach out to each other in a bid to break the prolonged impasse.
The talks with BJP, which has 25 MLAs, had hit a roadblock last week when the party's interlocutor Ram Madhav made it clear that no fresh demands would be entertained from PDP and that they had to decide whether they want to form a government based on the Agenda of Alliance document.
PDP and BJP had formed an alliance on March one, last year with Sayeed as the Chief Minister. Both the sides had formed an Agenda of Alliance which sought to address internal and external dimension of the state.
Governor's rule was imposed in J-K on January 8 after Mehbooba decided against taking over the reins after her father's death.