By Beth Duff-Brown, Associated Press, 06/08/02

NEW DELHI, India -- The threat of war between nuclear-armed India and Pakistan appeared to lessen further Saturday, with India saying Pakistan was making moves ''in the right direction'' and Pakistan affirming that ''ice has broken.'' A top U.S. envoy said tensions over the Kashmir region were down ''measurably.''

Still, cross-border shelling resumed along the cease-fire line that divides the disputed Himalayan region between India and Pakistan, claiming 10 more lives. Three were killed on India's side of the frontier, while Pakistan reported seven dead.

Deputy Secretary of State Richard Armitage, fresh from talks in India and Pakistan, said Saturday that both countries seemed prepared to make conciliatory gestures. India is considering the return to Pakistan of some recalled diplomats and making ''military gestures'' to lessen tensions.

''I think you couldn't say the crisis is over, but I think you could say the tensions are down measurably,'' Armitage told reporters as he arrived in Estonia on a flight from New Delhi.

He said he expected New Delhi to make reciprocal gestures within days to Pakistan's assurances that it will halt cross-border infiltration of the Islamic militants who have waged a violent 12-year insurgency for the independence of Indian Kashmir or its merger with Pakistan.

''It's quite clear that there will be some actions on the part of India responding to the messages I brought'' from Pakistan, said Armitage, who met with Pakistani President Pervez Musharraf on Thursday and Indian Prime Minister Atal Bihari Vajpayee on Friday.

Armitage stopped in Estonia to consult with Defense Secretary Donald H. Rumsfeld, who was attending a weekend meeting with Baltic and Nordic defense ministers. Rumsfeld is to visit Pakistan and India in a few days to resume the talks.

The Indians ''are talking about some diplomatic actions, which could include the return of some people to diplomatic postings in Islamabad and some ratcheting down of some sort of military tension,'' Armitage said.

''They are going to make, as I understand it, perhaps some military gestures as well, prior to Secretary Rumsfeld's arrival,'' he said.

Nirupama Rao, spokeswoman for the Indian Foreign Ministry, said that through Armitage, India had responded positively to Musharraf's assurances.

''India welcomes the pledge by President General Pervez Musharraf to permanently end cross-border infiltration of terrorists into Jammu-Kashmir,'' Rao said. ''This is a step forward and in the right direction.''

Indian Foreign Minister Jaswant Singh conveyed similar sentiments to Secretary of State Colin Powell during a phone call Saturday, Rao said. Powell also spoke with Musharraf on Saturday, the State Department said.

Singh told Powell that India would carefully assess how Musharraf's promise was carried out and ''respond appropriately and positively,'' she said.

In Pakistan, Information Minister Nisar Memon said it seems ''the ice has broken and due to the efforts of our friends, India has started understanding our position.''

In response to Armitage's comments, Memon said he hoped India would agree to resume dialogue with Pakistan on all issues, ''including the core issue of Kashmir.''

''It's our commitment that we will not allow anyone to use our soil for terrorism within and outside of Pakistan,'' Memon told the AP in Islamabad. ''It's a good beginning.''

A senior Indian military officer told The Associated Press that the government was likely to announce within 48 hours measures to de-escalate tensions, such as lifting some of the mutual sanctions they imposed after a Dec. 13 attack on the Indian Parliament. But the troops along their frontier were likely to remain in place until India could better assess that infiltration of militants had ended, he said.

India and Pakistan cut air and road links, downsized their embassies and massed nearly 1 million troops on the border after the Parliament attack, which New Delhi blamed on Pakistan-based Islamic groups. Pakistan denied the charge, but New Delhi has threatened to retaliate with war unless Musharraf made a tangible effort to halt the infiltration.

Despite the positive indicators, India and Pakistan resumed cross-border shelling Saturday, killing at least 10 people.

Pakistan's government-run television reported seven people killed by shelling on the Pakistani side of the frontier and 13 others injured.

A witness in the Pakistani town of Tattapani said people ran for cover as Indian shells started falling Saturday afternoon. Ambulances poured into the nearby village of Kotli, about 140 miles south of Muzaffarabad, capital of Pakistan-controlled Kashmir.

Abdul Rehman, 46, a carpenter, took shelter in the basement of a mosque with his wife and two children.

''We came here to save ourselves. God knows what will happen,'' Rehman said. ''We are in great danger. We have no life here.''

In Indian-controlled Kashmir, a woman was killed when Pakistani shells whistled into her village in the Arnia area, about 20 miles west of Jammu, the winter capital of India's northern Jammu-Kashmir state, police said. In Balnoi, another Indian village along the cease-fire line, two men were killed and three others wounded in shelling, police said.

Elsewhere, Pakistan said its jets shot down an unmanned Indian spy plane. Pakistani officials said the plane was carrying an Israeli-made camera and caught fire moments after it came under attack late Friday. India's Defense Ministry confirmed the downing of the unmanned drone.

Also Saturday, suspected Islamic militants ambushed and killed three Indian soldiers in the Punch district, about 125 miles northwest of Jammu, Indian officials said.

Jammu-Kashmir state is the only Muslim-majority state in predominantly Hindu India. Guerrillas have been fighting there since 1989 to carve out a separate homeland for Kashmiris or merge Kashmir with Pakistan, which like India claims all of the Himalayan province. The dispute has been at the root of two of the three wars fought between the South Asian adversaries.

The insurgency has claimed more than 60,000 lives. Pakistan says it offers diplomatic and moral support to the militants, but denies arming them.