An Indian border guard watches a Muslim couple walk away as their house is searched for militants on January 15 in Srinagar, Kashmir.

NEW DELHI—As Secretary of State Colin Powell embarks on his second visit to South Asia since September 11, India and Pakistan continue to stand eyeball to eyeball for the second month, with three-quarters of a million troops mobilized at the border between the two nuclear rivals.

India’s largest-ever military build-up was launched in response to an attack on December 13 on its Parliament by five men, who New Delhi claims were Pakistan-based “terrorists” connected with two groups, Lashkar-e-Toiba and Jaish-e-Mohammed. The attack, in which 14 people were killed, was condemned by governments the world over, including Pakistan.

Like the United States did with September 11, India hyperbolically dubbed the December 13 attack an “act of war” and an “assault” on democracy. And like the United States, it too refuses to make any distinction between terrorists and their supporters and harborers. It demands that Pakistan surrender those whom it has named—a list of 20 “terrorists” it claims are responsible for activities similar to the December 13 attack—or else.

The United States leaned toward India in this confrontation, and in the last week of December placed two groups, Lashkar-e-Toiba and Umma Tameer-i-Nau, on the “foreign terrorist organizations” list. Bush has repeatedly demanded that Pakistan crack down on “terrorist” groups active against India, while British Prime Minister Tony Blair, during a visit in early January, conveyed the same message in tough words to Pakistani President Pervez Musharraf. The Indian government feels greatly encouraged by the early U.S. statement that it has the right “to act in self-defense” following December 13 and has imposed harsh diplomatic sanctions on Pakistan.

Musharraf, for his part, has cracked down on a number of extremist jehadi organizations, freezing bank accounts, sealing offices, and arresting more than 1,600 jehadi militants. In a landmark speech on January 12, he announced a major “anti-terrorist” policy change and held out substantial concessions to India. New Delhi, however, has refused to de-escalate its military build-up. It wants Islamabad to blink first by surrendering the 20 “terrorists.” Powell thus finds himself in the middle, trying to calm extremely frayed nerves in the troubled subcontinent. Yet ironically, India is in some ways only imitating the United States and that other very American example, Israel, in its fight against “terrorism.”

For the past month, India has played a game of brinkmanship, steadily ratcheting up military pressure and coercive diplomatic measures against Pakistan. The pressure has largely been exercised through the United States—by frightening Bush with the prospect of a South Asian nuclear confrontation, India implored him to tell Pakistan to take “effective” action against terrorists.

Prime Minister Atal Behari Vajapyee’s government persists in the dangerous game of nuclear poker, even though its adversary has announced dramatic, far-reaching changes in its policy on terrorism and violence. In his January 12 speech, Musharraf inaugurated a radical break with Pakistan’s two-decades-old policy of Islamization by announcing a plan to sever the links between political Islam and the state, between the military and the mullahs, and between Kashmir and terrorist violence. This is perhaps the boldest attempt since Kemal Atatürk’s campaign in post-Ottoman Turkey to secularize and modernize a Muslim-majority society.

True, Musharraf emphasized the importance of resolving the Kashmir dispute—a sore point with India—and ruled out extraditing Pakistani nationals involved in “terrorism” (who will be dealt with domestically). But he said he would consider an extradition request in regard to non-nationals found in Kashmir. He also offered a dialogue on Kashmir.

India is skeptical of Musharraf’s concessions only partly because of past experience. Pakistan has all along claimed it has no military relationship with the militants active in Kashmir, when in reality it has trained and armed them. (It did the same with the Taliban in Afghanistan.)

But there are two other, weightier reasons for India’s cold reception to Musharraf’s speech. The first is India’s resentment at its exclusion from the inner circle of the post-September 11 “anti-terrorist” coalition put together by Washington, to which Pakistan has been central. India today vies with Pakistan to become America’s “strategic partner” and “most-allied ally” in South Asia.

The second reason is domestic—related to the trademark politics of Vajpayee’s right-wing Bharatiya Janata Party. For the BJP, the “anti-terrorism” slogan conveniently diverts attention from its political failures and human rights abuses in Kashmir. It has also become a way to garner Hindu-nationalist votes. These votes could be crucial to the BJP’s electoral gamble in Uttar Pradesh, India’s largest state, where it faces a make-or-break contest next month. If the BJP loses Uttar Pradesh, its national coalition could be in jeopardy.

India and Pakistan stand at a crossroads. Vajpayee must choose between short-term, uncertain domestic gains or abiding peace and reconciliation with Pakistan. The first means continued vassal-like dependence on Washington, which is now building military bases in Pakistan. The second could open up rich new possibilities for a peaceful South Asia, which could return to long-neglected social agendas like fighting poverty and illiteracy.

The United States too must decide if it will set a negative, militaristic example for South Asia and exploit the India-Pakistan rivalry or, alternatively, play a modest, useful role by counseling restraint and de-escalation and encouraging a dialogue on Kashmir.

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