NEW DELHI - India on Monday cancelled talks with Pakistan scheduled for next week, angrily berating Islamabad over a meeting between Pakistan's high commissioner and Kashmiri leaders.

The foreign ministry said Monday's meeting between the Pakistani envoy and separatist leaders in Indian-administered Kashmir had undermined efforts by the new Indian government to engage with Islamabad.

Pakistan said the cancellation of talks between Indian Foreign Secretary Sujatha Singh and her Pakistani counterpart Aizaz Ahmad Chaudhry was a "setback" for relations between the nuclear-armed neighbours. Pakistan's foreign office described meetings with pro-independence leaders as a "longstanding practice" ahead of talks with India, held "to facilitate meaningful discussions".

"The Indian decision is a setback to the efforts by our leadership to promote good neighbourly relations with India," the foreign office said in a statement.

Relations between the two neighbours broke down after attacks by Pakistani gunmen on India's commercial hub Mumbai in 2008 in which 166 people were killed.

But Indian Prime Minister Narendra Modi's surprise move to invite his Pakistani counterpart Nawaz Sharif to his swearing-in ceremony in May spurred hopes that peace talks between the two countries could resume.

Last month, they scheduled talks between Singh and Chaudhry for August 25.

The high commissioner's move to meet with separatists comes at a time of political turmoil in Pakistan, where opposition leader Imran Khan has called for mass civil disobedience to unseat the government.

Indian foreign ministry spokesman Syed Akbaruddin told reporters that Singh had warned Pakistan's envoy against meeting separatists.

To do so "undermines the constructive diplomatic engagement initiated by Prime Minister Narendra Modi on his first day in office," he said.

The unresolved territorial dispute over Kashmir in the Himalayan region has for decades been a major source of tension between the two neighbours, who have fought three wars since partition in 1947.

The last week has also seen heightened tensions in Kashmir, where India and Pakistan have traded accusations of ceasefire violations.

India's Hindu nationalist leader last week accused Pakistan of waging a "proxy war" in disputed Kashmir as he visited the region.

Kashmir is divided between Indian and Pakistan by a de-facto border known as the Line of Control (LoC) and controlled separately by the rivals.

The insurgency and long-running rivalry with Pakistan has made Indian Kashmir one of the world's tensest regions.

There are an estimated half a million troops deployed in Indian Kashmir.

Violence has fallen in the region since 2004 when the two countries began a peace process, but there are sporadic attacks on government forces while residents often accuse government forces of human rights abuses.

US deplores talks cancellation

Our Special Correspondent from Washington adds: The United States on Monday described as “unfortunate” India's move to cancel next week's talks with Pakistan, saying it would continue to support efforts by the two countries to improve their relations.

“It is unfortunate that the planned talks between India and Pakistan have fallen through,” State Department Deputy Spokesperson Marie Harf told reporters at the daily press briefing.

She was replying to a question about New Delhi’s decision to call off foreign secretaries talks which were scheduled to be held in Islamabad following Pakistani High Commissioner Abdul Basit's meeting in New Delhi with Kashmiri leaders.

Irrespective of why the talks were cancelled the two countries now need to take steps to improve their relations, she explained, when pressed about Indian contention that the talks were cancelled in view of Pakistani diplomats meetings with the Hurriyat leaders and ceasefire violations in Kashmir.

“What matters now is that both sides take steps to improve their bilateral relations. We have been very clear about that," the spokesperson said.

“We continue to support efforts by India and Pakistan to improve all aspects of their bilateral relations,” she added.

“We know there are a lot of issues on the table, there is a lot of emotion involved here,” she acknowledged in a reference to a series of issues that have been a source of rivalry between the two neighbors.

When asked if the Indian move pointed to the broader question of the need to address Kashmir dispute, the spokesperson said, the US position on Kashmir remains unchanged.

She also said that pace, scope and character of any discussion on Kashmir are for India and Pakistan to determine between them.