Indian Prime Minister Atal Behari Vajpayee has convened a cabinet meeting to discuss the latest diplomatic moves following his meeting with a senior envoy sent by Mr Sharif.

And as India continued overnight air strikes on militant positions, police said 17 Muslim civilians were killed in two villages in the Indian state of Jammu and Kashmir.

The BBC's Mike Wooldridge: It is a slow-moving military campaign

India also says its forces have recaptured two more positions from the infiltrators they are fighting in Kashmir to the west of the strategically important Tololing Ridge.

The ridge itself was reported re-captured last week and India now says it has further reduced the risk of effective shelling along the only highway that serves the area where the fighting is taking place.

It has also emerged that British Prime Minister Tony Blair has written to the Indian prime minister urging restraint, as the tension between India and Pakistan continues at the highest level since they went to war nearly three decades ago.

China want talks

China has again called for talks between India and Pakistan to end the crisis, following Mr Sharif's early departure for home, via Hong Kong.

Pakistani officials described his meetings as highly successful but gave no details.

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The BBC Beijing correspondent, Duncan Hewitt, says China wants to be seen to be taking an even-handed approach to the conflict.

The Pakistani prime minister is said to be under pressure from the United States to end the military confrontation and ease tension in the region.

And with diplomatic tension high, India has protested to Pakistan over what it says was the abduction, detention and beating of an Indian High Commission employee in Islamabad.

The Indian Foreign Ministry said the man was abducted on his way to work and not released until several hours later, after India had lodged a protest.

Pakistan has dismissed the charges as baseless.

Envoy's visit

India announced on Monday that former Pakistani Foreign Secretary Niaz Naik visited Delhi and that there had been an exchange of messages between the two country's prime ministers.

The BBC's Mike Wooldridge reports on behind the scenes contact between the two prime ministers

Correspondents say that India has reiterated its intention to return to the formal dialogue process, which includes Kashmir, once what it describes as Pakistani infiltrators had left from Indian-administered Kashmir.

Mr Vajpayee was immediately forced onto the defensive in Delhi, assuring opposition leaders that there would be no secret deal with Islamabad.

Islamabad continues to deny that the meeting took place.

Attacks continue

Meanwhile, India continued overnight strikes on enemy positions in line with planned 24-hour air strikes announced on Monday.

(Click here to see a map of the area)

India says it is facing Pakistani army regulars fighting alongside armed infiltrators. Pakistan denies the allegation and says it only offers moral support to Kashmiri freedom fighters.

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Police have said unidentified gunmen killed 17 Muslim civilians in two border villages in the Indian state of Jammu and Kashmir.

The police said the killings could have been the result of a feud within one of the militant Kashmiri separatist groups - the Hizb-ul Mujaheddi. A spokesman for the group blamed Indian security forces.

On Monday three Indian soldiers were killed in a fire fight with separatist guerrillas in the border district of Kupwara, north of the capital Srinagar.

Up to 40 guerrillas were reported to have recently entered the Kashmir Valley from across the "Line of Control" that divides the disputed region. Police estimate that four or five of the guerrillas might have been killed.

India says it has lost 175 soldiers in the fighting, with 364 wounded and nine missing.