Weapons of Mass Destruction (WMD)

DATE=12/27/01

TYPE=CORRESPONDENT REPORT

TITLE= INDIA / PAKISTAN (LONG)

NUMBER= 2-284665

BYLINE=ANJANA PASRICHA

DATELINE=NEW DELHI

CONTENT=

VOICED AT:

INTRO: India announced new diplomatic and economic sanctions against Pakistan as a two-week standoff between the two nations intensified. Pakistan has retaliated by announcing similar measures against India. Anjana Pasricha reports from New Delhi, India has ruled out talks with Pakistan despite growing international pressure on the two countries to defuse the escalating friction.

TEXT: Foreign Minister Jaswant Singh says in the next two days the Indian Government will cut its diplomatic staff in Islamabad by half, and ask Pakistan to do the same in New Delhi. Pakistan says it will match these sanctions.

India has banned Pakistan's national airline from using Indian airspace after January 1st. Pakistan says it will bar Indian aircraft from using its airspace.

This has effectively cut transportation between the two countries. New Delhi had earlier said it will terminate bus and train service between the two countries.

Pakistani diplomats in India will also be restricted to Delhi because according to Mr. Singh they have been engaged in espionage and dealings with terrorist organizations.

Mr. Singh says the measures have been announced due to Pakistan's failure to take effective action against two Pakistani-based militant groups which India alleges were behind the recent attack on its parliament.

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These are once again minimal measures that are being taken. We hope even now the Government of Pakistan will understand the gravity of the situation and take urgent measures to curb the activities of terrorist groups. The Government of India remains ready to take such further measures as are considered necessary.

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Pakistan says it has frozen the assets of one of the militant groups blamed by New Delhi for the attack on parliament, and arrested the leader of another.

Mr. Singh says the steps are meaningless because the freezing of assets came after the militant group (Lashkar-e-Toiba) emptied its bank accounts, and the jailed leader was quickly freed. He called on Pakistan to show that it is a serious member of the international coalition against terrorism.

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That is why it is doubly regrettable that attempts to dupe the international community with

half-measures, non-measures or even fictitious incidents are still being made. This is not acceptable.

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The Foreign Minister said he would not speculate on how far or how close the two countries are from a military confrontation, but said there was no need for worry. Islamabad also says it does not want the conflict to escalate, but will retaliate if attacked by India.

India's Defense Minister George Fernandes says the deployment of troops on India's border with Pakistan will be complete by the weekend. The two countries are engaged in the biggest military buildup in nearly two decades, raising tensions and fears of an armed conflict. Sporadic shelling and exchange of gun fire has continued in recent days on the tense border between the two countries.

Fears of a possible war have made Indian financial markets nervous, driving down stocks and the rupee to their lowest level in recent weeks. (signed)

NEB/AP/RH