Pakistan continues to insist that it's intelligence agency (ISI) is not supporting and the armed separatist groups operating in Kashmir and India. It's an open secret that the Kashmiri rebels operate out of camps in Pakistan and could not do so without government support. Given the current War on Terrorism, Pakistan can't admit this long time support. And the war in Kashmir is popular in Pakistan, and a major sore point in India. As a result, India has recalled it's ambassador to Pakistan and halted the movement of public transport across the border.
This support for armed Kashmiri rebels began in 1988, when the president of Pakistan was an army general who had embraced Islamic fundamentalism as the cure for Pakistan's woes. Many of Pakistan's Moslems see the decision form separate Moslem and Hindu states, when Britain left India in 1947, as a mistake. India has done much better, economically and politically. The problem for Pakistan was that the only largely Moslem areas available to form the Moslem state in 1947 were separated by India (Bangladesh in the east, Pakistan in the west.) Although the inhabitants of both nations were Moslem, they had little else in common. Eventually, Eastern Pakistan rebelled and became Bangladesh. Pakistan was left with a hodge podge of tribes and settled peoples who had long lived on the edge of India. Pakistan never came together. And then there was the resentment factor. For most of the past 800 years, a Moslem minority dominated largely Hindu India. Then the British came in during the 19th century and Hindus were able to use their larger population to eventually control a democratic India. The militaristic, conquering spirit of Indian Moslems have not been able to get democracy working in Pakistan and most Pakistanis don't like it. The Kashmir situation just rubs it in. One reason for starting the armed resistance to Indian rule of Kashmir in the 1980s was the realization that most of the Moslems there preferred democratic Indian rule to Pakistan's ever changing collection of corrupt democrats and authoritarian generals running things. India always had nearly as many Moslems as all of Pakistan, and Indian Moslems were doing better economically than Pakistani Moslems.
Pakistan is relying on it's support from America to keep the Indian's from going to war (which could turn nuclear.) But this support won't last forever, and eventually something has to be done about the Kashmir terrorists. Pakistani president Musharraf would like to suppress the Islamic radicals, and he has an opening with the radicals weakened by the collapse of the Taliban in Afghanistan. But in the meantime, democracy could work against India, with popular demand for a military response against the Pakistani camps of the terrorists leading to military action.