By Maria Golovnina and Fayaz Bukhari
ISLAMABAD/SRINAGAR, India (Reuters) - Pakistan and India accused each other of provoking violence on their troubled Kashmir frontier on Wednesday as a week of cross-border shelling threatened to derail attempts to resume peace talks between the nuclear-armed rivals.
Tension flared along the de-facto border on August 6 when five Indian soldiers were ambushed and killed in a remote Himalayan district. India blamed the attack on the Pakistan army. Pakistan denied any involvement.
On Wednesday, India's army said a group of unidentified gunmen had tried to cross into India in the first infiltration attempt from the Pakistani side since the August 6 incident, provoking its servicemen to open fire. Two gunmen were killed.
"The army today foiled an infiltration bid in Keran sector of north Kashmir along the Line of Control with Pakistan and killed two militants," said Lieutenant Colonel Brijesh Panday, an Indian army commander.
Hindu-majority India and Islamic Pakistan have fought three wars since independence in 1947, two of them over Muslim-majority Kashmir which they both claim in full but rule in part.
Although tit-for-tat artillery fire frequently rattles the so-called Line of Control, separating Indian- and Pakistani-controlled Kashmir, infiltration and cross-border ambushes have become rare in recent years.
Indian officials are concerned, however, that Pakistan wants to redeploy militants back into Indian Kashmir as the war in Afghanistan comes to an end - a charge dismissed as nonsense by Pakistan's government which denied backing any militants.
The two armies have been exchanging fire since Tuesday, straining a ceasefire that has largely held for nearly a decade.
The renewed bitterness has cast doubt over preparations for what both sides see as a potentially breakthrough meeting between Indian Prime Minister Manmohan Singh and his Pakistani counterpart, Nawaz Sharif, in New York in September.
Speaking in Islamabad alongside visiting U.N. Secretary-General Ban Ki-moon, Sharif called for a lowering of tension.
"We have to defuse tensions and de-escalate the situation. Our objective is peace. What we need is more diplomacy," he said. "The escalation of tensions along the Line of Control is a matter of concerns for us and the secretary general."
Pakistani President Asif Ali Zardari sent his Indian counterpart an Independence Day greeting saying Pakistan was committed to improving ties.
"It is my sincere hope that we would be able to resolve all outstanding issues between our two countries peacefully, and address the common challenges of ensuring the well being and prosperity of our peoples," Zardari said in his message to Indian President Pranab Mukherjee.
The two countries gained independence from Britain in August 1947. Pakistan marks the day on August 14, India on August 15.
"SILENCE THEIR GUNS"
There was no immediate comment from Pakistan's army on the latest Indian accusation, but military sources in Islamabad said one Pakistani civilian was killed earlier in the day in Battal sector as a result of "unprovoked Indian shelling".
"Firing was intense and they (Indians) were using small and heavy arms, including artillery, and targeting civilian populations," local administration official Malik Ayub Awan told Reuters from Poonch district.
"A shell landed on a house in a small hamlet, namely Kharni in Battal sector, sometime after midnight, razing it to the ground and killing a 60-year-old man and injuring his teenaged daughter," he added.
A Pakistani army official on the ground told Reuters: "We did respond to the shelling to silence their guns. But we target only military installations across the Line of Control and not the civilians populations."
Two other incidents were reported elsewhere on the border.
The tense mood has spread far beyond the heavily militarized front line. In Islamabad, there has been talk that Pakistan might scale down its diplomatic presence in India although the foreign ministry would not comment on the speculation.
An annual visit of Pakistani pilgrims to the tomb of a renowned Sufi Muslim musician and poet in India has been cancelled for security reasons, according to the Pakistan High Commission.
Earlier, Pakistan's national airline said it had tightened security at its office in New Delhi after two men sprayed black paint on the walls and dropped a note of warning at the door.
Addressing his nation in a speech marking Pakistan's Independence Day, Sharif crucially singled out the army as a pillar in his strategy to eliminate threats against Pakistan.
"Today, clouds of extremism and terrorism are hovering over us," Sharif said. "I know that our nation with the cooperation of the Pakistan army and other law enforcement institutions will root out terrorism and will make Pakistan a peaceful place."
(Additional reporting by Ashok Pahalwan in Jammu, India, and Abu Arqam Naqash in Muzaffarabad, Writing by Maria Golovnina; Editing by Robert Birsel)