Are India and Pakistan likely to stumble into nuclear war? This appalling possibility has long been kept alive by conflicts between the two historical enemies, but it may have been pushed closer to fulfilment by a catastrophic failure of US foreign policy in South Asia. In recent weeks, a cover story in the Economist on the worlds most dangerous border, and former US Secretary of State Henry Kissinger warned of a pre-World War I, Balkans-like scenario in South Asia that leads to a global conflict. Other developments, which have largely escaped the radar of Western commentators, give deeper cause for foreboding. A day after US Navy SEALs killed Osama bin Laden, the Indian army and air chiefs declared that the Indian military was capable of mounting similar operations in Pakistan. Pakistans spy chief, Lieutenant General Ahmad Shuja Pasha, responded with the claim that the Pakistani military had already rehearsed retaliatory strikes on India. This isnt just playground posturing. Soon after conducting nuclear tests in 1998, Indias Hindu nationalist government threatened Pakistan with an all-out war. The rhetoric on the other side of the border was no less intemperate. In 2001, the Hindu nationalist-led government responded to a terrorist attack by the militants on Indias Parliament by mobilising hundreds of thousands of troops on the border. Both nations eventually pulled back from the brink. Angry Indian Politicians But since then, terrorist attacks, such as the one on Mumbai in November 2008, routinely provoke angry calls from Indian politicians and news commentators for surgical strikes on the alleged training camps and headquarters of extremist groups in Pakistan. Writing as Israel pounded Gaza a few weeks after the Mumbai attacks, the former diplomat Shashi Tharoor spoke of Indias Israel envy. Indians know that war with Pakistan would be catastrophically counterproductive. Yet, as he wrote, when Indians watch Israel take the fight to the enemy, killing those who launched rockets against it some of them cannot resist wishing that they could do something similar in Pakistan. One reason India hasnt is that since 2004 it has had a prime minister, Manmohan Singh. Last month, he distanced himself from Indias Strangelovian military bosses and talking heads, and a line of thinking that he said was mired in a mindset that is neither realistic nor productive. Manmohan Singhs Dilemma Singh knows that the long-unresolved issue of Kashmir lies at the heart of the tense relationship between India and Pakistan. More than 70,000 people, mostly Muslim, have died in India-Held Kashmir. Any Idiots Guide to South Asia will tell you that peace in the region will remain a distant dream until India and Pakistan reach a solution acceptable to Kashmiri Muslims as well as nationalists in both countries. This will initially require, at the very least, India to shift troops out of the Kashmir valley, where during the past two summers hundreds of thousands of Indian soldiers have confronted increasingly nonviolent and overwhelmingly young Muslim protesters. Indias new image in Europe and America as a rising power has diminished the Indian appetite for compromise and negotiation. Following Russias Example Singh faces a strident domestic constituency that believes in isolating and neutering Pakistan while striking Held-Kashmir with what a former Indian diplomat called, invoking Russias example in Chechnya, an iron fist. There is in India, as in Israel, a public opinion that recoils at the prospect of talking on equal terms with neighbours viewed as terrorists. As is the case in the Middle East, the only country to have leverage with both parties is the US and there are few obstacles to using this leverage with India. The close American relationship with India is still new, and not captive to domestic politics in the US. Seeking to make India a strategic counterweight to China, and a solid business partner, the administration of George W. Bush rewarded it with an exceptionally generous nuclear deal. Americas Dual Role There is of course an unresolvable contradiction in a foreign policy that builds up Indias military and economic capacity while pushing Pakistan to launch resource-draining campaigns against extremists. Not surprisingly, the sight of the US cozying up to Pakistans traditional enemy has made the Islamabad establishment not only more paranoid, but also more duplicitous in its dealings with American military and intelligence. The diplomatic advantages of the new American intimacy with India have yet to come into clear view. Unlike Bush, President Obama is fully aware of the importance of Kashmir to his most urgent foreign policy challenge: stabilising Afghanistan and Pakistan. He came to office claiming that working with Pakistan and India to try to resolve the Kashmir crisis in a serious way were among the critical tasks for the next administration. Arguing With Pakistan The argument for the Pakistanis was to be: Look at India and what they are doing, why do you want to keep being bogged down with this, particularly at a time when the biggest threat now is coming from the Afghan border? But as the WikiLeaks cables revealed, the Obama administration surrendered quickly to the Indian ultimatum that the envoy to the region, the late Richard Holbrooke, exclude Kashmir from his responsibilities. Holbrooke himself remained convinced, according to his widow, Kati Marton, that Pakistan would remain unstable and vulnerable to extremism until adequate steps to resolve Kashmir were taken; he advocated more American pressure on India in this regard. When Obama visited India in late 2010, however, he chose to encourage Indias naively triumphalist self-perception as a country that has already arrived. Its unlikely that he subscribes to the anachronistic Cold War binaries of the Bush administration that counterpoised India and China. Yet he carefully avoids mentioning Kashmir in his speeches. Like the Balkans Perhaps its not too late for Obama to try the more even handed and integrated approach to India and Pakistan that he outlined as a candidate. The mood in both countries is febrile - Kissingers analogy with the pre-WWI Balkans is exact in this respect. The Indian media are giving extensive coverage to the terrorism trial in Chicago. Any new terrorist attack originating in Pakistan would vastly increase the number of Indians clamouring for an assault on their neighbour; and even Prime Minister Singh may not be able to resist them. Pakistan of course has been readying itself for a military incursion across the border. Last month, it tested a remarkably mobile missile system designed to unleash low-yield nuclear weapons on tank formations. Faced with a rash Indian strike, it might well behave even more recklessly - an increasingly plausible scenario that Americas rigidly compartmentalised policies in South Asia have done little to thwart. Bloomberg