Congress general secretary Rahul Gandhi also attended the meeting, in which Andhra Pradesh Chief Minister Kiran Kumar Reddy and other state leaders made presentations on various options. Mr Reddy had separately met Sonia Gandhi before the meeting.
Pro-Telangana parties say they want nothing less than a separate state - financial packages or other sops won't do.
To add to the Congress party's dilemma, its own leaders from Telangana are firmly backing a separate state. Congress MP V Hanumantha Rao today said if the party did not take a decision soon, the people of Telangana would be shattered.
TRS leader KT Rama Rao, who broke away from the UPA in 2006 over the issue, says there is no reason to believe that the Congress will go ahead with a separate Telangana, going by past record.
The BJP has also challenged the Congress. "In the 2002 Lok Sabha polls, Manmohan Singh and Sonia Gandhi promised Telangana within one year. The BJP believes when the NDA comes to power, the dreams of the people from Telangana will come true," said BJP's Capt Abhimanyu.
On the other hand are protesters from the coastal and Rayalaseema regions, who are opposing Telangana. Anti-Telangana groups have called a bandh today.