HIGHLIGHTS: Monitoring Indian-Pakistani Border Key Challenge to Breakthrough in Crisis|| Rumsfeld Warns that Qaeda & Taliban Could Use Kashmir Issue to Stir Trouble in the Himalayas||Cross-border Shelling Claims More Lives|| STORY: U.S. Defense Secretary Donald Rumsfeld began a peace mission to India and Pakistan Tuesday, aiming to build on an easing of tensions that had brought the nuclear-armed rivals to the brink of war. (Read photo caption)

Rumsfeld was due to meet Prime Minister Atal Behari Vajpayee and key Indian ministers Wednesday before moving on to Islamabad for talks with Pakistan President Pervez Musharraf.

Indian analysts said a key challenge for Rumsfeld would be to find a way acceptable to both sides to verify an undertaking from Musharraf that he would stop Pakistan-based militants from infiltrating Indian-ruled Kashmir to carry out attacks.

India wants only bilateral monitoring, while Pakistan has said there should be an outside component to the mechanism.

WARNING THAT QAEDA & TALIBAN COULD USE KASHMIR TO STIR CONFLICT IN THE HIMALAYAS

Rumsfeld, speaking earlier in Qatar, said Musharraf had made "a very firm commitment to do everything he can to prevent infiltrations across the line of control permanently."

He said both sides should be aware that problems could occur that were not their doing, cautioning that militants of the al Qaeda and Taliban groups who fled Afghanistan could use the Kashmir issue to stir conflict between India and Pakistan.

The Indian government has warned banks and financial institutions in India's commercial capital Bombay that they could be the target of "major terrorist action" in the next 10 to 12 days, according to a letter obtained by Reuters on Tuesday.

Sent out at the weekend, the Finance Ministry advisory cited what it said was information that pointed to involvement by Taliban militants and Saudi-born Osama bin Laden's al Qaeda.

CROSS BORDER SHELLING CLAIMS MORE LIVES

At least eight people, including four members of one Pakistani family, were reported killed Tuesday in what has become a daily exchange of artillery and mortar fire across the "line of control" in Kashmir.

India and Pakistan both conducted nuclear tests in 1998 and have ballistic missiles. A special envoy of Musharraf, however, said there was a "zero percent" chance of nuclear conflict.

PHOTO CAPTION

U.S. Defense Secretary Donald Rumsfeld (L) talks with U.S. ambassador to India Robert Blackwell at New Delhi airport soon after his arrival June 11, 2002. Rumsfeld began a peace mission aimed at easing tensions between nuclear neighbors India and Pakistan. (Kamal Kishore/Reuters)