India, trying to revive a stalled peace process, has offered to talk with Kashmiri separatists for the first time and to open new border crossings with Pakistan - including one in disputed Kashmir.
In a highly symbolic move, foreign minister Yashwant Sinha said today the cabinet had also decided to resume sporting ties with Pakistan, including the subcontinent's most popular sport, cricket, which was frozen in 2000 after a major military clash.
But he maintained India's insistence that Pakistan stop Muslim separatists crossing into Indian Kashmir to join a bloody 14-year revolt and said dialogue was not possible with Islamabad unless evidence was seen on the ground that "cross-border terrorism" was being brought to an end.
Pakistan said it would give serious consideration to the new Indian proposals but added it was disappointed New Delhi had rejected its offer to resume dialogue.
A foreign office statement said any proposal that was substantive, genuine and unconditional would receive a positive response and urged India to reconsider its position on talks.
"We are disappointed that while making these proposals India has simultaneously reiterated its rejection of Pakistan's offer to resume substantive and sustained dialogue to resolve all issues, notably the Jammu and Kashmir dispute," it said.
India and Pakistan started on a shaky peace path in April and restored full diplomatic relations and a sole bus route. But the process slowed amid rising violence in Kashmir and Islamabad's concerns about the pace of progress in New Delhi.
Bloodshed continued in the revolt-torn region today.
A Pakistan official said six people, including a 12-year-old girl and 14-year-old boy, were killed by Indian artillery fire across the military line Indian and Pakistani Kashmir.
Suspected separatists set off a crude bomb in a courthouse in southern Jammu and Kashmir, killing an Indian police constable and wounding several others.
About a dozen groups are fighting in Kashmir for either independence or merger with Pakistan, in a rebellion that has killed well over 35,000 people over the last 14 years.