On December 20, Pakistan announced a partial withdrawal from the Line of Control (LoC) in Kashmir, responding to India's extension of a cease-fire against Kashmiri militants. India's Prime Minister Vajpayee cited "encouraging developments" in announcing the decision to extend the cease-fire beyond the original December 28 deadline to January 26, 2001. The latest developments suggest that the Indian cease-fire against the militants and Pakistan's commitment to exercise "maximum restraint" along the LoC have succeeded in creating a new dynamic in the region.

Mr. Vajpayee said "relative peace has prevailed along the LoC" since the cease fire was first announced. Significantly, he added that there has been a "recognizable decline in attempts at crossing the LoC and cross-international border infiltration of terrorists." An end to "cross-border terrorism" has been a key Indian condition for a resumption of a dialogue with Islamabad. India's defense minister has said if Pakistan "genuinely" stops all firing across the border and stops the "influx of terrorists," it would lead in a direction that would "enable us to perhaps sit and talk."

President Clinton praised the initiatives saying they raise `` the hopes of the world community that peace is possible in Kashmir. '' He added, ``To achieve that end, I continue to believe that all parties should reject violence and work for a peaceful resolution of the conflict through dialogue.''

The cease-fire first took effect on November 27, an olive branch offered during Ramadan, the Muslim month of fasting. It was the first time since the Pakistani-backed insurgency began in 1989 that India ceased pro-active military action in Kashmir.

Pakistan followed up the announcement of its restraint along the LoC with a December 4 statement saying it would not object to bilateral talks between New Delhi and the largest umbrella organization of Kashmiri militants, the All Parties Hurriyat Conference (APHC), provided "tripartite talks" involving Pakistan begin the next stage of negotiations immediately after Ramadan. This is a subtle, but significant, shift away from Pakistan's previous opposition to any talks between New Delhi and the Kashmir militants that did not involve Islamabad. Later Pakistan's Foreign Minister, Abdul Sattar, told CNN that he would like "tripartite talks" to begin before the end of Ramadan, on December 27. While, this remains unlikely, the prospects for dialogue appeared to have improved.

Officially, India has rejected the idea saying, "It is abundantly clear that there is no room" for "tripartite talks." After the Kargil confrontation in the summer of 1999, India has refused to resume negotiations with Islamabad, citing continued "cross-border terrorism" as an obstacle. A formula facilitating indirect negotiations that could conceivably cool the Kashmir flash point, however, would be difficult to dismiss outright, particularly if conditions on the ground continue to improve.

Pakistan has said it would invite the APHC to facilitate "parallel talks" through separate discussions with New Delhi and Islamabad. Already some Indian opposition members have welcomed Pakistan's offer, saying it should be viewed "with an unprejudiced mind," and that the opportunity for "parallel talks" with Pakistan "at some level" should not be lost.