India hinted at a possible breakthrough in its military stand-off with Pakistan, as it welcomed Islamabad's arrest of a top militant leader blamed for the recent attack on the parliament in New Delhi.
"If this information is correct, this is certainly a step forward in the right direction," Foreign Minister Jaswant Singh told reporters after a meeting of India's cabinet committee on security.
He was reacting to Pakistan's announcement that it had arrested the head of the Lashkar-e-Taiba and more than a dozen members of Lashkar and the Jaish-e-Mohammad -- the two Pakistan-based militant groups India has accused of carrying out the December 13 parliament attack.
Lashkar information secretary Yahya Mujahid confirmed party leader Hafiz Mohammed Saeed had been arrested by Pakistani police.
"Hafiz Saeed was arrested by the police in Islamabad late Sunday. We condemn this action by the government of Pakistan. It is very unfortunate and based on injustice," Mujahid told AFP.
India had dismissed previous measures taken by Pakistan as "cosmetic" but Singh said international pressure, arising from evidence furnished by India, seemed to have finally borne fruit.
"As far as evidence of terrorist activities is concerned it has been provided in sufficent measure to the international community, and it is largely on that ground that Pakistan has now begun to act."
Singh said he hoped such steps would be "pursued vigorously" so "cross-border terrorism" could be eliminated.
It was the first positive recognition of progress to emerge from New Delhi since the parliament attack triggered the largest military build-up on the Indo-Pakistan border for 30 years and left the South Asian nuclear rivals teetering on the brink of war.
The inherent dangers of the military face-off were underlined Monday by a heavy exchange of mortar fire across the disputed Kashmir border that left two Indian soldiers dead and five seriously injured.
India and Pakistan have fought three wars since gaining independence from Britain in 1947, twice over disputed Kashmir.
The current battle has mainly been fought on the diplomatic front, with India and Pakistan trading tit-for-tat sanctions, including the halving of their respective embassy staff and a reciprocal ban on using each others' airspace.
Indian Defence Minister George Fernandes said Monday the diplomatic offensive would continue until all peaceful channels for resolving the crisis had been exhausted.
India said it had handed over a list of wanted militants to Pakistan on Sunday night.
"They should be handed over to India for trial," Law Minister Arun Jaitley said, adding the prospect of war rested on Pakistan's response.
Musharraf has offered to meet Vajpayee on the sidelines of the January 4-6 South Asian Association for Regional Cooperation summit in Nepal. Bu India has ruled out any face-to-face talks.
However, Foreign Minister Singh hinted that he could meet with his Pakistani counterpart, Abdul Sattar, in Kathmandu.