The victims were migrant labourers from the Indian state of Madhya Pradesh. They were killed on Tuesday as they slept at the factory where they worked.

The incident happened barely a day after the massacre of 17 Muslims in the state's Poonch district.

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.

Military pressure

Indian soldiers say they have captured key posts

Indian air force and artillery units pounded militant bases in Kashmir on Wednesday, following India's recapture of two key positions from what it says are Pakistani-backed infiltrators.

The Indian military says it took control of Point 4700 and Black Rock, near the Tiger Hills area on Tuesday. Some 40 militants and 23 Indian soldiers were killed in the operation, according to Indian sources.

Mike Wooldridge in Delhi on the latest developments

An Indian commander spoke of "bunker-to-bunker fighting".

The positions lie to the west of the strategically-important Tololing Ridge which the Indians said they recaptured last week.

(Click here to see a map of the area)

Air force officials said bombers flew numerous nighttime sorties in the mountainous areas of northern Kashmir near the the Line of Control.

L. K. Advani: Front-line tour in Kashmir

Meanwhile, India's Home Minister, L K Advani, arrived in Srinagar early on Wednesday for a two-day visit.

He flew straight to the Kargil sector where he was expected to tour command posts in the main northern battle sectors of Drass, Batalik and Kargil.

Hopes for peace

Hopes of an end to the current conflict have been raised by comments from a senior Pakistani official who met the Indian Prime Minister, Atal Behari Vajpayee, at the weekend.

Niaz Naik tells the BBC the situation can be resolved

Former foreign secretary Niaz Naik told the BBC he was confident the Kashmir crisis would soon be resolved.

He said arrangements were being made for military officials from both sides to meet to prepare "a schedule of so-called withdrawal".

The BBC's Mike Wooldridge in Delhi says it is understood that the two countries' directors of military operations spoke to one another yesterday.

However, he says it is not known if they discussed the issues raised by Mr Naik.

As the diplomatic activity intensified, the Pakistani Prime Minister, Nawaz Sharif, cut short a visit to China.

Under pressure

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

Following his departure, the Chinese Government again called for talks between India and Pakistan to end the crisis.

The BBC's Zaffar Abbas: "There have been mixed signals coming out of Delhi"

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.

For his part, the UK Prime Minister, Tony Blair, has written to the Indian prime minister urging restraint.

Abuse accusations

With diplomatic tension high, both India and Pakistan have accused the other of abusing their diplomatic staff.

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

Pakistan has dismissed the charges as "totally baseless and malicious".

Meanwhile, an employee of the Pakistani High Commission in Delhi returned home in tears on Tuesday alleging that Indian security forces had arrested him on accusations of spying and beaten him up.