India broke off diplomatic ties with Pakistan and Prime Minister Atal Behari Vajpayee spoke of it being the time for a "decisive battle".

Pakistani President Pervez Musharraf promised to respond to any Indian attack with "full force".

Villagers on both sides of the border fled their homes as foreign governments advised nationals to leave the region. War was averted, in part due to a flurry of international diplomacy led by US Secretary of State Colin Powell.

Elections in October in the Indian-ruled part of Kashmir were seen as giving India an opportunity to pull back some of its troops. The election campaign was boycotted by separatists but heralded as largely “free and fair” by most observers. Pakistan followed suit in November. But troops remained stationed along the Line of Control in Kashmir.

2002 ended on a sour note with Pakistan postponing a regional summit to be held in Islamabad amid recriminations with neighbouring India.

In 2003 both sides continued testing their nuclear missiles. In February Pakistan said it had shot down an unmanned Indian reconnaissance plane over Pakistani territory. India accused Pakistan's embassy in Delhi of channelling funds to Kashmiri militant supporters. Both sides expelled the other's acting high commissioner.

Twenty-four Hindu villagers were massacred in Kashmir in March - India said Pakistan was involved.

In April, Indian Prime Minister Vajpayee offered to hold talks with Pakistan. The move triggered a warming of relations. In May both sides talked of re-establishing diplomatic and other ties. Pakistan also called for talks on the two sides dismantling their nuclear weapons.