India/Pakistan normalisation process stalled as Pakistan asked World Bank (broker of Indus Waters Treaty) to appoint neutral arbitrator to decide whether India’s construction of Baglihar hydro-power dam on Chenab river in Jammu and Kashmir should go ahead. Tensions rose across line of control after ceasefire violation accusations from both sides. Clashes between militants and Indian security forces continued. Indian foreign minister Natwar Singh to visit Pakistan 15 February.

Indian and Pakistani officials met Islamabad 14-15 December to discuss confidence building measures related to nuclear and conventional arms - no formal agreement reached to notify each other of missile tests (practice currently followed informally). Foreign secretaries met 27-28 December with no sign of progress over Kashmir. Pakistan test-fired medium- range surface-to-surface “Hatf-IV Shaheen-I” missile 8 December. India tested surface-to-surface version of its supersonic “Brahmos” missile 21 December. Talks 7-8 December on emotive issue of bus service between Srinagar and Muzaffarabad failed to reach agreement - discussions to continue. Spate of violence in run-up to talks left over 20 dead.

India began limited withdrawal of troops from Kashmir 17 November, citing fall in guerrilla violence. Indian PM Manmohan Singh visited Kashmir Valley same day, ruled out any redrawing of India's borders or further division of Kashmir as suggested by Pakistani President Pervez Musharraf in his (informal) October proposals. Pakistani PM Shaukat Aziz met Singh New Delhi 24 November; agreed to continue talks. Eleven rebels and 3 Indian soldiers killed 6 November in several attacks, including grenade assault in Srinagar during visit by India's home minister Shivraj Patil. Kashmiri separatist All Parties Hurriyat Conference (APHC) repeated longstanding demand their leaders be allowed to go to Pakistan to meet separatist leaders before formal talks occur. Indian soldiers shot dead 5 militants 3 November after mosque siege 45 km south of Srinagar.

Pakistani President Pervez Musharraf made unexpected public calls for “rethink” on Kashmir; ideas included defining, demilitarising and changing status of areas of Pakistan- and Indian-administered sections of Kashmir and some form of joint India-Pakistan or U.N. control. Indian official reaction muted; received mixed reactions from domestic and Indian press. Talks between Pakistan and India on proposal to start bus link in Kashmir set for 7-8 December in New Delhi. Team of Pakistani journalists visited Indian-administered Kashmir 4-6 October for first time since 1947. Sporadic violence continued included killing of former Kashmir minister 21 October; suicide bomb attack on Indian army convoy 9 October, killing 5; and failed assassination attempt on Jammu and Kashmir opposition leader and former chief minister Farooq Abdullah. Pakistani PM Shaukat Aziz to meet Indian PM Manmohan Singh in November in capacity as chairman of South Asian Association for Regional Cooperation. Pakistan tested nuclear-capable “Hatf-V Ghauri” missile 12 October; India tested medium-range nuclear-capable “Prithvi-III” missile 27 October.

Indian PM Manmohan Singh and Pakistani President Pervez Musharraf met for first time on sidelines of UN General Assembly in New York 24 September. Both leaders pledged commitment to dialogue. Foreign ministers previously met New Dehli 5-6 September; claimed modest progress, mainly on normalisation process. Major obstacles remain - Pakistan’s insistence on time frame for resolving dispute, India’s insistence Pakistan do more to stop cross- border infiltration of militants. Violent clashes continued, including incidents 18 September that killed 18.

Clashes between separatists and security forces continued as talks between India and Pakistan stalled. India’s ruling Congress party repeatedly expressed disappointment over what it says is Islamabad’s failure to curb Kashmiri guerrillas. Ten killed – including Manzoorul Islam, head of Jamiat-ul-Mujahideen separatist group – during 19 August visit by Indian President Abdul Kalam to Jammu and Srinagar. Further violence killed at least 18 in separate incidents. Possible talks between Indian government and Kashmiri separatist All Parties Hurriyat (Freedom) Conference (APHC) faltered at outset as government insisted next round should take place “within” constitution: rejected by APHC.

Violence worsened in run-up to Indo-Pakistan peace talks; over 200 killed including numerous civilians. Indian Foreign Minister Natwar Singh met Pakistani President Pervez Musharraf 23 July. India expressed disappointment with Pakistani statement stressing “time-frame” for settling Kashmir dispute. Current round of talks to culminate in New Delhi foreign ministers’ meeting 5-6 September.

Indian and Pakistani foreign secretaries met 27-28 June to discuss nuclear confidence-building measures and Kashmir as part of ongoing peace process. Expert-level talks on nuclear CBMs in Islamabad 19-20 June and low-level and unscheduled talks between foreign ministers on sidelines of Asia Cooperation Dialogue conference in China 20-21 June resulted in renewed ban on nuclear tests, and agreement to set up hotline between foreign ministries and reopen Karachi, Mumbai consulates. Attacks on civilians, clashes between security forces and militants continued. Three separate grenade attacks in Pahalgam, Handwara and Kunzer killed 7; 1 attack claimed by little-known Al-Nasreen group. Twelve Muslims, including 4 children, killed in shooting 26 June. India’s interior minister indicated government likely to hold peace talks with Kashmiri separatists in July.

Separatist violence continued. Mine blast killed 33 Indian soldiers and relatives in Indian-administered Kashmir 23 May; claimed by Hizbul Mujahideen, who lost senior commander in clash in outskirts of Srinagar 11 May. Kashmir's main separatist alliance, All Parties Hurriyat Conference (APHC), called strike in Srinagar to mark anniversaries of killings of key Muslim cleric and separatist leader. Top APHC leader Moulvi Umar Farooq targeted by militants in grenade attack. Farooq was part of January delegation for talks with former Indian PM; new talks due in July. New India PM Manmohan Singh vowed to act against militants and cooperate with Pakistan over disputed region.

Indian elections held in Jammu and Kashmir marred by violence. Grenade attack on rally of ruling People's Democratic Party 8 April killed 11. At least 5 more killed in separate attacks in Srinagar. Kashmiri separatist politicians and rebels rejected election, called for poll boycott. Office of main opposition Congress Party attacked.