MUZAFFARABAD/NEW DELHI, 6 February — Pakistani President Pervez Musharraf yesterday accused Indian Prime Minister Atal Behari Vajpayee of "brinkmanship" in the Kashmir crisis and warned nuclear-capable Pakistan would defend itself "with all means at its disposal".

"Instead of engaging in brinkmanship, Prime Minister Vajpayee should accept my offer of a dialogue," Musharraf told the Parliament in Pakistani-administered Kashmir during an emotive speech to mark Kashmir Day in Pakistan. "Instead of responding positively to the hand of reconciliation extended by me, the Indian leadership has continued with its threatening noises and persists with its massive deployment of troops ... which have brought the two countries to a position of eyeball-to-eyeball confrontation."

The nuclear rivals have massed 800,000 troops along their common border since the December attack on the Indian Parliament which New Delhi has blamed on two Pakistan-based militant groups. Despite calls from the international community for restraint, India has refused to order its military to stand down, saying Pakistan must first end the "cross-border terrorism" in Kashmir. "This is brinkmanship at its most dangerous," Musharraf said.

"If war is imposed on Pakistan, we will defend every inch of our soil with all the means at our disposal and the last drop of our blood. Let there be no underestimation of our resolve."

India strongly rejected Pakistani charges that it was engaged in state terrorism in Kashmir, and accused Islamabad of reverting to "yesterday’s clichés". India accused Musharraf of resorting to "untenable positions on terrorism."

An Indian spokeswoman also said Musharraf would have to live up to a pledge to end what India calls cross-border terrorism before New Delhi would begin talks to defuse the dangerous military standoff between them. "Comments about the Indian state of Jammu and Kashmir amount to interference in the internal affairs of India. We reject them outright," Foreign Ministry spokeswoman Nirupama Rao told a news briefing in New Delhi.

"We had rather hoped Gen. Pervez Musharraf would utilize this opportunity to reaffirm his commitment to end cross-border terrorism," Rao said of the Kashmir Day. Instead, "his formulations, unfortunately, have reverted to yesterday’s clichés."

Musharraf said Muslim activists fighting to end Indian rule in Kashmir were rebels against brutal Indian military occupation, not terrorists as New Delhi has tried to portray them. "India is engaged in a sinister worldwide campaign to denigrate and malign the Kashmiri freedom movement ... it wants to hoodwink the international public opinion by playing on Western apprehension."

The Pakistan leader, who took control in a bloodless coup more than two years ago, reiterated demands that India accept UN resolutions to allow the people of Kashmir to decide whether to join India or Pakistan. By ignoring the right for self-determination, India had itself to blame for the Kashmiri uprising which has raged on the Indian side of the divided state since 1989, he said.

"In short, the Kashmiri youth is being brutally and systematically decimated," Musharraf said, referring to "torture camps" in Indian-held Kashmir. The general said Islamabad would never end its diplomatic, political and moral support for Kashmiris. But he insisted the struggle in the disputed territory was "being funded and sponsored by the sweat and blood" of the indigenous people, not Pakistani militants as claimed by India.

A small group of protesters burned an effigy of Vajpayee outside UN offices in Islamabad, demanding the implementation of long-standing UN resolutions supporting Kashmir’s right to self-determination.