The Srinagar explosion was widely condemned
The propaganda battle between India and Pakistan over Kashmir got even hotter following a car bomb attack on the state assembly building in Srinagar earlier this month.
Delhi's strategy is clear. In a letter to US President George W Bush, Prime Minister Atal Behari Vajpayee is reported to have urged America to extend its fight against terrorism to Kashmir.
Islamabad denied that militant groups operated from Pakistan and condemned the attack as a terrorist act.
Despite attempts to link their struggle with global terrorism, Kashmiris living in Pakistan do not seem too worried.
Ghulam Qadir, Finance Minister in Pakistan-controlled Kashmir, said Kashmiris had a "basic right" to fight against Indian occupation.
'War of liberation'
"When you fight against a foreign occupation it is according to the charter of the United Nations," he said.
"We are fighting a war of liberation and we are fighting against the occupation forces. We are not fighting against the civilian targets of any other country. We are fighting in our own land. That is why it is not terrorism."
The government in Islamabad was quick to condemn the attack, in which most of the victims were civilians, and Kashmiris in Pakistan also distanced themselves from it.
Nasir Ahmed Shah, editor of weekly magazine the Kashmir Mirror, and originally from Indian-administered Kashmir, suggested that India could have been behind the attack, trying to build up international support against the insurgents in Kashmir.
"It is always painful to hear about the deaths of innocent civilians but at the same time it needs to be understood that the people of Jammu and Kashmir are struggling against India, which has been called by many people a regional bully in South Asia," he said.
"My argument is that this may have been an Indian manoeuvre to benefit by the international scenario that is emerging.
"Mujahadin (Islamic militant) sources have said that they had nothing to do with this car bombing."
Mr Shah said he understood that Jaish-e-Mohammad had also denied carrying out the attack.
New political ambitions
In fact, Jaish-e-Mohammad did originally claim responsibility, although its leaders have since kept quiet, possibly at the urging of Pakistan.
Islamabad wants to play down the activities of Pakistan-based militants.
It has high hopes that its position on Kashmir could be strengthened by the current international crisis.
The argument goes that now Pakistan is a frontline state against terrorism, Washington will be forced to take more notice of the ongoing Kashmiri struggle for self-determination.
The weak spot in that argument is the group of foreign militants operating in Kashmir.
Some are from Arab countries and some have links with Osama Bin Laden.
Analysts like Riffat Khan, director of the Centre for Strategic and Defence studies at Quaid-e-Azam University in Islamabad, believe that Pakistan should review that aspect of its Kashmiri policy.
Militants 'must be curbed'
He said Pakistan should go out of its way to ensure that militants did not discredit the Kashmir freedom movement.
"It will be in the interest of the Kashmiris themselves that they should try to isolate these external influences and thereby not give India an opportunity to give a bad name to the entire Kashmir freedom movement," he said.
As yet, though, there is no sign that Pakistan is prepared to curb foreign militants fighting in Kashmir.
Perhaps it could not even if it wanted to.
When Soviet troops left Afghanistan 12 years ago, some foreign mujahadin turned their attention next door to Kashmir.
It may be difficult now for either Pakistan or India to prise their tightening grip loose from that disputed territory.