In major policy shift, Pakistani President Pervez Musharraf offered to drop longstanding demand for plebiscite, conditional on progress in talks with India on Kashmir. Foreign Minister Mahmood Ali Kasuri and Information Minister Sheikh Rasheed noted Pakistan continues to support plebiscite but would consider other options. Ceasefire along Line of Control (LOC) holding as normalisation steps continue. Both sides agreed to resume overflights, air and rail links from 1 January. India accelerating work on security fence along LOC, criticised by Musharraf. Ceasefire not supported by Kashmiri separatist groups, though violence reportedly has decreased: death toll since 26 November truce over 150. Indian PM Vajpayee confirmed attendance at January South Asian Association for Regional Cooperation (SAARC) summit in Islamabad; not yet known whether bilateral negotiations on Kashmir will take place.

Hope tempered by scepticism as ceasefire on Line of Control (LOC) began midnight 26 November – first formal ceasefire since start of insurgency in 1989 but longer term significance remains to be seen. Pakistani PM Jamali announced unilateral ceasefire on LOC 23 November, one month after India’s surprise peace initiative proposing 12 concrete steps toward Indo-Pak normalisation. Indian offer included restoration of further transport links and renewal of sporting ties; but, crucially, no discussion on Kashmir itself. After stumbles over preconditions, Indian Deputy PM Advani ready for unconditional talks with All Party Hurriyat Conference (umbrella organisation for Kashmiri separatist groups). PM Vajpayee agreed to attend long-delayed SAARC regional summit in Islamabad in January 2004 but ruled out bilateral talks. Pakistan offered 30 November to allow direct overflights, banned since January 2002, opening way for full resumption of air links. Meanwhile violence continues unabated in the valley. Kashmiri rights groups reports that abuses by Indian security forces fuelling indigenous recruitment into extremist groups. Government sources estimate 40,000 casualties since 1989; separatists claim more than 80,000.

In surprise move by India, fresh peace initiative launched 22 October, proposing 12 concrete steps toward Indo- Pak normalisation, including restoration of further transport links (including aviation and reopening of road between Indian and Pakistani-controlled Kashmir) and renewal of sporting ties; but crucially, no discussion on Kashmir itself. Proposal broadly accepted by Pakistan, but disappointment expressed at “piecemeal” approach. Pakistani Foreign Minister Riaz Khokhar proposed four further confidence building measures; technical talks planned for November. India’s hard-line Deputy PM, L.K. Advani, offered talks with moderate faction of All Party Hurriyat Conference, (umbrella organisation for Kashmiri separatist groups) yet 35 members of both Hurriyat factions taken into ‘preventive detention’ for holding procession in Srinagar 27 October. Attempt 17 October by Muslim separatist group, Al- Mansoorian, to assassinate Chief Minister Mufti Mohammed Sayeed provoked nine-hour battle between police and militants. Fighting continues across Line of Control. Government sources estimate 40,000 casualties since 1989; separatists claim more than 80,000.

Surge in violence casts shadow over progress in Indo-Pak normalisation. Sources say September fatalities exceed 300 – mostly rebels. War of words in UN General Assembly as Indian PM Vajpayee accused Pakistani President Musharraf of “terrorist blackmail”, calling latter’s offer of ceasefire an admission that Pakistan supports militants. Fragile situation in Kashmir dealt another blow as All Party Hurriyat Conference (separatist umbrella group) split. Kashmiri militant groups warned of more violence in valley.

Despite continued violence, including bomb explosion in Srinagar shortly before Indian PM Vajpayee arrived on 27 August, Indo-Pakistani relations have improved in recent months. Initial responses to Mumbai bombings on both sides confirmed improvement. Echoing Vajpayee’s April offer, Pakistani President Musharraf called on 11 August for talks about ceasefire along Line of Control. However, both sides continue to attach unrealistic preconditions to talks. Ghazi Baba, Commander in Chief of Jaish-e-Mohammed and alleged architect of December 2001 attack on Indian parliament, killed in gun battle in Srinagar on 30 August.