Indian defense officials have confirmed that they lost an unmanned aircraft over Pakistani territory. Pakistan said it shot down an unmanned Indian spy plane.

An Indian defense ministry spokesman said an unmanned reconnaissance plane "on a routine flight" lost contact late Friday, and fell about 20 kilometers inside Pakistani territory. The comment came hours after an announcement by Islamabad that Pakistani fighter jets had shot down an Indian plane close to the eastern city of Lahore, about 30 kilometers from the border with India.

Indian defense officials tried to play down the incident, saying in the present state of military deployment, the use of such planes by both sides is common. Pakistan's foreign minister Abdul Sattar called for restraint, saying responsible states must take care not to provoke an escalatations in tensions.

The incident took place as U.S. Deputy Secretary of State Richard Armitage left the region saying "tensions are a bit down." His visit was part of diplomatic efforts by the United States to avert a possible war in South Asia.

Indian foreign Ministry spokesperson, Nirupama Rao, said India has received assurances from U.S. officials that Pakistan would take permanent steps to halt cross-border infiltration of Islamic militants into Indian Kashmir.

"According to what has been conveyed to us by the U.S. adminsitration, President Musharraf has made clear that ceasing infiltration across the line of control needs to be an action that is permanent," Ms. Rao said.

The Indian response has been guarded. New Delhi officials have said if the Pakistani assurances of a halt to cross-border infiltration are translated into action in the coming days, they will take reciprocal steps to reduce tensions between the two countries.

Indian newspapers Saturday appeared optimistic that tensions are likely to ease after Mr. Armitage's visit. A Hindustan Times headline read: "War threat recedes after Armitage visit" and The Times of India headlined: "Armitage raises hopes in New Delhi."

Despite the diplomatic efforts to ease tensions, violence continued unabated in Kashmir.

Indian Police said four Muslim villagers, members of a local defense committee, were gunned down by suspected Islamic militants. In another incident, three Indian soliders were reported killed in an exchange of fire with Muslim infiltrators.

India and Pakistan also traded heavy artillery and gunfire across the border in Kashmir . The firing is reported to have killed seven people on both sides.