KARACHI, 14 December — While Pakistan is engaged in a bold attempt to make the most of a bad diplomatic bargain in the aftermath of the Taleban rule in Afghanistan, its old rival in South Asia is doing all it can to exploit Pakistan’s discomfiture. Primarily, of course, India wants the world to take cognizance of what it claims is “cross-border” terrorism in its part of the disputed region of Kashmir. But it is also keen to celebrate the dominance of its old ally and Pakistan’s adversary, the Northern Alliance, in the new administration of Afghanistan. In spite of gaining a lot from its “unstinted support” to the US-led coalition against terrorism, Pakistan has certainly suffered some embarrassment with the revival of influence in Afghanistan of not just India but also of Russia and countries of Central Asia.

Against this backdrop, prospects for resumption of dialogue between the two countries remain uncertain. Indian Prime Minister Atal Behari Vajpayee has recently been refusing to talk to President Pervez Musharraf. Initially, he felt chagrined by the manner in which the Indians thought Musharraf had wrecked the Agra summit in July with his insistence that Kashmir was the central issue of discussions. Then, he was obviously encouraged by the international environment against terrorism to adopt a tough posture and demand that after Afghanistan, attention should be diverted to “terrorism” in Kashmir. And the Americans did make some noises that India saw as supportive of its stance.

In any case, a meeting between Vajpayee and Musharraf seemed finally set in Katmandu in early January, on the sidelines of the SAARC summit. But there was this statement by an Indian official on Monday that the “present vitiated environment” might not allow the two leaders to hold any meeting on this occasion. Pakistan responded quickly and on Tuesday, its Foreign Office spokesman said that it was ready to hold dialogue with India on all issues and to improve the environment for talks if there were any hurdles in the way. Pakistan also rejected the charge that Pakistan’s interference in “occupied” Kashmir was a barrier to the talks.

In the same briefing, Pakistan rejected speculation and reports that Islamabad and Kabul were not likely to have friendly relations after the political change in Afghanistan. At least from Pakistan’s side, there is a visible resolve to establish a new and more realistic relationship on its western borders.

That this inclination is not that apparent on the eastern side remains a seminal issue. Now that hard-liners seem to be calling the shots in New Delhi, it will be difficult for Islamabad to make any concessions. Also, many observers feel that there may be some surprises in store about what the Americans may ask Pakistan and India to do in and about Kashmir.

Because both countries have nuclear weapons and both are not known to be rational in their behavior, the world is very anxious to see them resolve their disputes. Kashmir is recognized as the main, if not the only, issue. The present environment has given a new sense of urgency to the need for reconciliation in this region.

Every important American or European visitor to Islamabad and New Delhi in recent weeks has called upon the two countries to resume their peace process. However, the most optimistic response from Vajpayee was his recent observation that if there is a SAARC summit and if he goes to Katmandu to attend it and if he meets the Pakistan president, he would see what could be done to reactivate the peace process.

Whether this happens or not, Pakistan has to realize that after the war in Afghanistan and the launching of a campaign against international terrorism, a qualitative change has taken place in the geo-strategic environment of the subcontinent. There is a new and strong interaction between the United States and India.