Most of the recent violence in Kashmir has been directed at Moslems who are either opposed to the rebel terror operations, or appear to be wavering in their support. After all, what's the point of using terror if you can's use it to terrorize your opponents to leave, and terrorize your followers to continue giving support.
Peace talks over Kashmir, and other disputes between India and Pakistan, are off to a slow start. Most of the activity so far has consisted of the two sides hurling accusations of non-cooperation at each other. Pakistan is trying, but they have three different sources of terrorism to deal with. First, there are the Islamic radicals (including pro-Taliban Pushtun tribesmen in the northwest) who want an Islamic state. Then there are the Kashmiri Islamic radicals and their Pakistani allies, who want the Indians, and all non-Moslems, out of Kashmir. Finally, there is al Qaeda, who want Islam to rule the world. All three of these groups have some overlap, all are opposed to the government and all have some allies in the government. But none of these radical groups can run a government. Check out Afghanistan, Sudan and Iran for recent examples of this. What the radicals can do is keep the pot boiling indefinitely, and that suits them just fine.