Indian Prime Minister Atal Behari Vajpayee says New Delhi will do its utmost to avoid war with Pakistan, but vows to stamp out terrorism. Meanwhile, Pakistan's foreign minister says Islamabad does not seek war with India, but warns that a small action could set off a larger conflict. Indian and Pakistani troops continue to exchange sporadic gunfire along their border, as tensions in the region remain high.

Prime Minister Vajpayee says he will use all the means and resources at India's command to put an end to what he called "Pakistan-sponsored crossborder terrorism."

Addressing a meeting of his Bharatiya Janata party, he said India will try its best to avert war. But he asked the country to be prepared for any eventuality. He says India will not give up its struggle against terrorism under international pressure.

In the wake of a huge military buildup along the India-Pakistan border over the past two weeks, most western countries have called for restraint, and urged the two countries to open a political dialogue. U.S. Secretary of State Colin Powell has been in almost daily contact with leaders from the two countries in an effort head off a full scale conflict.

However, India has rejected the idea of high level talks. Foreign ministry officials say a meeting between the Pakistani president and the Indian prime minister on the sidelines of a regional summit next week in Nepal is highly unlikely. On Friday, Pakistani President Pervez Musharaf said he was willing to meet with Prime Minister Vajpayee to ease the current tensions. Pakistan's foreign minister said Saturday that Islamabad had not made any specific request for a meeting, but would respond positively, if India wanted such talks.

Lower level discussions on the sidelines of the summit are also not being ruled out.

Current tensions between the two countries escalated in the wake of a terror attack on the Indian parliament earlier this month. India accuses Pakistan of failing to take effective action against two Pakistani-based militant groups blamed by New Delhi for the attack. Pakistan has taken some steps against militant organizations and denies India's claim that Islamabad backs any terrorist activities against India.

A leading strategic affairs expert, C. Raja Mohan, says India would be prepared to open talks, if Pakistan takes concrete steps against these groups.

What they are saying is, 'you cannot fudge the issue by calling for a dialogue now.' India has tried to talk to Pakistan in the last many years' with terrorism continuing on the side. But, I think, after the attack on parliament, it has been a fundamental shift, and India's tolerance level has been breached. Now they are saying, 'you act first, everything else follows.'

Foreign ministry officials say India will examine reports that Pakistan has arrested about 50 militants. President Bush on Friday urged India to take note of the action taken by Pakistan's leader.

Prime Minister Vajpayee is convening a meeting of all political parties Sunday to consolidate support for his government's diplomatic and political stance toward Pakistan.

India is also taking steps to protect the world famous Taj Mahal monument in the northern city of Agra from possible Pakistani airstrikes, if an armed conflict erupts. The monument's glittering white marble dome and pillars will be camouflaged with a huge battle green cloth.

Meanwhile, the last buses connecting the two countries have departed from both the Pakistani city of Lahore and the Indian capital, New Delhi. In a diplomatic tit-for-tat, the two countries are severing air, road and rail links starting January 1st. The bus service had helped thousands of ordinary people in both nations vist their relatives on the other side of the border.