The agreement between Pakistan's president, Pervez Musharraf, and India's new prime minister, Manmohan Singh, to continue talks on all contentious issues including Kashmir has inspired optimism about reduced tensions in South Asia. If decades of conflict are to be settled, however, the two sides must both do much more to address grievances and deal with the legacies of a half century and avoid too ambitious an effort to attempt everything at once. They need to foster all forms of bilateral contact and improve the lives of Kashmiris, who have borne the worst of the conflict. Dialogue will have to be expanded beyond high governmental levels if real constituencies for peace are to be nurtured.

This report builds on previous work published by ICG on Kashmir and India-Pakistan relations and was written after extensive consultations with experts representing various viewpoints. It does not lay out a template for peace or what a comprehensive solution would look like because the circumstances for a diplomatic endgame are not yet ripe. Any such proposal at this stage would surely be rejected by both sides. Instead, it suggests steps forward to widen a peace process and make it more sustainable. Previous attempts to reach agreement have all faltered, often after highly-charged summit meetings. It is vital that the current attempts be structured in a way that makes them more durable and less prone to disruption by extremists or violence. Many suggestions are made throughout the paper on how to do this, and how to improve the lives of Kashmiris. The main themes are outlined below.

Five forms of dialogue will be needed to work toward a lasting peace:

Dialogue on normalisation of relations. This is already going on but will need to deal with ways to reduce the risks of conflict and develop confidence building measures (CBMs). Previously agreed CBMs have generally failed and will need to be revitalised while new links should be established to reduce risks of conflict. A wider array of economic, social, sporting and un-official "Track II" contacts should be established.

Dialogue with Kashmir. Relations between the federal government in New Delhi and the state authorities in Srinagar have improved but more could be done. There needs to be revival of debate on Article 370 of the constitution that granted Kashmir a high degree of autonomy, commitment to a ceasefire and willingness to follow through with policies aimed at improved security, human rights and economic welfare in the province. Pakistan's relationship with Muzaffarabad and the area of Kashmir under its control will also have to be reassessed: Pakistan should allow free elections there and reduce the role of security forces. It should also discuss constitutional and legal changes that undermine the governance of the area.

Dialogue within each country. Both Pakistan and India need to do more to open up discussion at home about normalisation and Kashmir. Parliamentary debates should be sustained outside times of crisis, and both sides ought to do more to explain the economic and social benefits of peacemaking. India will have to recognise the usefulness of a greater international role in supporting any peace and making progress to improve lives in Kashmir. Pakistan will need to follow through on its repeated pledges to end assistance to extremists who resort to violence in Kashmir and to halt infiltration across the Line of Control.

Dialogue within Kashmir. Kashmir is now a highly divided society. Efforts must intensify to mend the rifts between its three religious groups -- Muslim, Hindu and Buddhist -- to reduce the gulf between rural and urban areas and to deal with the issue of displaced people.

Dialogue across the Line of Control (LoC). Improved relations between India and Pakistan will eventually have to lead to greater contacts among Kashmiris across the LoC. Both sides should permit a wider array of contacts and desist from anything that would disrupt future dialogue.

All discussion on these issues will be contentious but necessary if the relationship between India and Pakistan is to gain enough ballast that it cannot again be upset as it was in 1999 and 2002 when they nearly went to war.

Kashmir has been changed for ever by more than a decade of conflict. Beyond the political discussions that need to take place, much more must be done to repair the fabric of society in a way that reduces extremism and gives new hope for the future. State Premier Mufti Mohammed Sayeed's call for a "healing hand" needs to be backed up with concerted federal and state action to boost the economy, re-establish tourism, improve human rights and security, reduce abuses by the security forces and help the many victims of the conflict.

Everything from governance to education and healthcare needs funding and inventive policymaking.

Almost all the burden of ending conflict in South Asia lies with the Indian and Pakistani governments but supportive, sustained and sensitive international assistance is also required. Direct mediation or a major UN role have been rejected by New Delhi but the Indian government should recognise that some post-conflict assistance would be useful. The U.S. has played a key role in defusing conflicts but needs to develop a longer-term policy perspective to prevent crises from blowing up. The European Union (EU) should make South Asia a greater priority and be more willing to take an active part there by promoting economic and social integration and doing more to promote democracy in Pakistan.

Any number of missteps could derail the tentative process that is now under way. India and Pakistan must recognise that dialogue will only prosper if it is gradual, sustained, and held mostly outside the glare of the media. They should resist the temptation to push the pace on contentious issues  and opt instead to move steadily toward a normalisation of relations. Additional and modest CBMs, including enhanced trade ties, would strengthen existing domestic stakeholders, create additional ones and generate an enabling environment for negotiations on the Kashmir dispute.

Islamabad/New Delhi/Brussels, 24 June 2004