The latest India-Pakistan spat started when five militants of unknown origin attacked India's main parliament chamber, the Lok Sabha, killing eight people before being killed themselves. India immediately pinned the blame on Kashmiri separatist groups, supported -- so it claimed -- by Pakistan's Inter-Services Intelligence agency (ISI). The two groups specifically held responsible by New Delhi were Lashkar-e-Toiba and Jaish-e- Mohammed.

Lashkar-e-Toiba is a predominantly Kashmiri group, operating in Indian Kashmir. Jaish-e- Mohammed was founded by Maulana Azhar Masood and is based in Pakistan. Masood was the prisoner released by Indian authorities after his supporters hijacked an Indian Airlines plane in 1999 and took it to Afghanistan.

Pakistan vigorously denied the charges and condemned the attack. It called for evidence of Lashkar-e-Toiba or Jaish-e-Mohammed's involvement to be made public and said that, if such evidence were provided, it would take action. It also offered to participate in a joint inquiry with the Indians. Both offers were flatly rejected by New Delhi.

Acting on their conviction that Pakistan's ISI was behind the attacks, the Indians insisted that Pakistan stop promoting "cross-border terrorism." Pakistan's High Commissioner in New Delhi, Javed Qazi, was called into the Indian Foreign Ministry and served with a written demand that Pakistan arrest Lashkar and Jaish leaders and freeze their assets. Pakistan said it would not take such a measure without proof. The Indian Foreign Secretary also ruled out a prospective meeting between Pakitsani President Musharraf and Indian Prime Minister Vajpayee on the sidelines of the forthcoming South Asian Association for Regional Cooperation (SAARC) summit in January in Nepal.

The Indians then went further by announcing that their High Commissioner in Islamabad would be recalled, and road and rail links with Pakistan would be cut from 1 January. At the same time there were troop movements on both sides of the India-Pakistan border and increased exchanges of fire across the Line of Control (LOC), which is the de facto border between Indian and Pakistani- controlled Kashmir.

Indian Home Minister LK Advani ominously said these were just the first of a "series of penal steps." He threatened that India might withdraw from the Indus River Water Treaty with Pakistan (one of the few examples of bilateral cooperation) and ban Pakistani civilian aircraft from flying over India. In the latest sign of deteriorating relations, Pakistan accused the Indian government of kidnapping and torturing one of its High Commission staff in New Delhi.

Could India and Pakistan be about to go to war again? The two countries have already fought four major wars. Just as Indians have blamed Pakistan for the Lok Sabha attack, so some in Pakistan have suggested that India staged the attack to malign Pakistan and the Kashmiri freedom movement.

Both versions are unlikely to be true. President Musharraf's government has nothing to gain and everything to lose by backing such an assault on the Indian Parliament. If New Delhi were responsible for the attacks, it could never hope to keep its involvement a secret. The most likely explanation is that one of the pro-Kashmiri groups acted on its own initiative.

The Indian response -- sabre-rattling about attacking camps in Pakistan, and recalling its High Commissioner -- appears disproportionate when one considers that only a handful of guards and minor personnel were killed. Far more people were killed in a similar suicide attack on the Legislative Assembly in Srinagar, the capital of India's Jammu and Kashmir State, on 1 October.

But India's response has to be seen in the context of the new global campaign against terrorism. India has long tried to portray the armed separatist movement it faces in Indian Kashmir as merely a problem of Pakistan-sponsored terrorism. The attacks on 11 September, and the US response to them, caused New Delhi to greatly increase its efforts in this regard. It tried very hard to show that it was facing the same terrorist menace -- though sponsored by Pakistan -- as America. Hence the stress in Prime Minister Vajpayee's condemnation of the 13 December incident on "stopping both terrorists and those that sponsor them."

But the response of the Indian coalition government, headed by the Bharatiya Janata Party (BJP), was also motivated by domestic considerations. The BJP faces tough state elections in Uttar Pradesh (UP) in two months time. Uttar Pradesh is the largest state in the Indian Union and without it no government can hope to hold power for long in New Delhi. The BJP has also been trying to pass a much- maligned piece of anti-terrorism legislation, the Prevention of Terrorism Ordinance (POTO). This controversial piece of legislation has been attacked as draconian both from within India and from abroad. Finally, Defence Minister George Fernandes has been embroiled in a growing controversy over the purchase of special aluminium coffins for victims of the Kargil conflict.

The Indian government has made full use of the 13 December attack to relieve all these domestic pressures. To a large extent, it has been successful. The coffins scandal has been all but forgotten and many analysts predict POTO will now be passed without any significant opposition. And the BJP's hard-line stance against Pakistan should yield votes in Uttar Pradesh.

India's drive to have Kashmiri separatism labelled as a terrorist movement with Pakistan as its sponsor has been less obviously successful.

President Bush and other senior administration officials were quick to condemn the attacks on the seat of the "world's largest democracy." But the White House fell short of backing Indian condemnation of Pakistan. Washington urged New Delhi to share the findings of its investigations with Islamabad and also offered FBI assistance. Although the US did add Lashkar-e-Toiba to a list of individuals and groups suspected of terrorist activity whose assets are to be frozen, it carefully described the group as "a stateless sponsor of terrorism."

America, Russia, China and other countries have expressed concern about the escalating tension in the region. Few believe that India seriously desires or is planning a war with Pakistan. Nor do many give credence to Indian threats that they will it strike suspected camps within Pakistani-controlled Kashmir. Irrespective of the motive and selective targeting, that would be seen by Islamabad as an act of war and it would respond in kind.

The danger, however, is that the situation could spiral out of control. The dynamics of escalation could force a conflict even where one was never intended.

Fortunately, there are people on both sides who seem aware of this danger. President Musharraf has warned the Indians against any "adventurism" but his government did not take the knee-jerk response, common in the past, of recalling its High Commissioner from New Delhi. India's Prime Minister Vajpayee has also tried to dampen down the war-mongers within his own party, reminding them that war was only one of a number of options.

A full-blown war or any kind of serious military engagement is unlikely, but the whole episode will definitely be a further setback in relations between the two nuclear powers. In the past the first agenda item on any India-Pakistan talks would usually be Kashmir. Now, it will have to be the resumption of normal diplomatic relations. Resolving the Kashmir dispute will, therefore, be that much more difficult.