Crucial talks on Kashmir

India's prime minister was today holding front-line talks in Kashmir with his military advisers hours after putting his country's million-strong army on a war footing and warning its troops to prepare for sacrifices.

Britain, along with the rest of the world, is looking anxiously towards the outcome as fears continued to mount that India and Pakistan, both nuclear powers, may be edging closer by the hour to the verge of all-out war over the disputed Himalayan state.

Army officers declared that the troops were ready for war and prepared to die.

After another night of artillery and heavy machinegun exchanges, security around prime minister Atal Behari Vajpayee's final leg of his three-day visit to Kashmir was massive.

Hundreds of troops, backed by helicopter gunships, covered his every move as he travelled towards the summer capital, Srinagar.

It was there that a highly volatile crowd of more than 10,000 mourners shouted "we want freedom" and pro-Pakistan slogans as they turned out yesterday for the funeral procession of assassinated Kashmiri separatist leader Abdul Ghani Lone.

Lone and a bodyguard were shot dead in daylight on Tuesday while attending a rally in the city centre.

There were reports today that Pakistan had produced an eleventh-hour concession in a bid to avert all-out war.

Hours after Mr Vajpayee had rallied troops for a "decisive battle", General Pervez Musharraf 's military government in Pakistan was reported to have pledged for the first time that it would not allow Kashmir to be used for terrorist activity.

However, as India moved extra warships to the Arabian Sea off its coast, Pakistan publicly responded by warning India against any military "misadventure" and vowing to use "full force" if attacked.

With the two nuclear nations trading bellicose warnings, the United States and its European allies said they were working behind the scenes to stop the two sides slipping into war.

"The message clearly to everyone is that it is a dangerous situation and that our hope and all of our efforts are aimed at encouraging them to lessen the tension along the border, both in Kashmir and elsewhere," US Defence Secretary Donald Rumsfeld said. State Department officials echoed his concern, saying: "What we want to do right now is to prevent a war."

India blames Pakistan for attacks by Islamic militants in Kashmir, its only Muslim-majority state, and farther afield. A December attack on the Indian parliament in the capital New Delhi triggered the latest military stand-off between the rivals.

Passions flared last week after an attack on an Indian army camp in Kashmir in which 31 people, mostly wives and children of soldiers, were killed by suspected Pakistan-based militants.

The crisis has launched a flurry of peace shuttles to the region. European Union external affairs commissioner Chris Patten will be followed by Foreign Secretary Jack Straw early next week, and US Deputy Secretary of State Richard Armitage in early June.

Australia today followed Britain and America in urging its citizens living in Pakistan to leave and advising people to defer all travel to Pakistan. The Australian government also called the Indian and Pakistan high commissioners to meetings in Canberra to voice its concern about the possibility of hostilities between the two countries.

Talk about the threat of war