HIGHLIGHTS: Two Armies Exchange Heavy Artillery, Mortar & Machinegun Fire ||No Americans Died in Karachi Blast|| Previously Unknown "Tarjuman-Al-Qanoon" Claims Responsibility for Karachi Blast|| STORY: At least five people were killed as Pakistani and Indian troops traded heavy fire in disputed Kashmir on Friday, hours after Defense Secretary Donald Rumsfeld ended a peace mission to the region, Pakistani officials said. (Read photo caption)

Nine others were also wounded in firing across the frontline dividing Indian-ruled Jammu and Kashmir from Pakistani-held Kashmir and the province of Punjab, officials on both sides said.

Rumsfeld said on Thursday he believed the leaders of the two nuclear-armed neighbors were behaving responsibly but there was still a risk the two countries could slide toward conflict.

Officials said the two armies exchanged heavy artillery, mortar and machinegun fire at several places along their frontier in the Himalayan region -- at the heart of a crisis, which has triggered fears of war.

The two armies have exchanged heavy fire in Kashmir for the past month that has killed scores of civilians on both sides and forced thousands to flee their villages.

Fears of war spiraled after a militant raid on an Indian army camp in Kashmir in May. However, the threat of war eased slightly last week following U.S.-led diplomatic efforts to pull the rivals back from the brink.

U.S. CONSIDERS CUTBACKS IN PAKISTAN

Meanwhile The U.S. diplomatic presence in Pakistan, already sharply reduced because of security problems, may be cut back further after Friday's deadly attack on an American consular office in Karachi.

The attack occurred after Pakistani President Pervez Musharraf, under heavy U.S. pressure, began acting to curb infiltration by Islamic militants into the Indian sector of Kashmir.

Early U.S. suspicion centered on the al-Qaida and affiliated Pakistani Islamic extremist groups, but officials said they had no direct evidence of who was responsible.

No Americans were believed to have died in Friday's suicide car bombing. The bomber and 10 other people were killed, and the injured included a U.S. Marine and five Pakistani employees of the consulate. Many of the victims were passers-by.

Late Friday, Karachi newspapers received a fax message claiming responsibility in the name of the previously unknown "Tarjuman-Al-Qanoon," or Spokesman for the Law. The message said the attack was a "preview with more to follow" and was part of a holy war against the United States and its "puppet ally," the Pakistani government.

A State Department official said the bombing led to the early closing Friday of the American Center in Islamabad and consular offices in Karachi, Lahore and Peshawar.

A decision will be made over the weekend whether to reopen the offices Monday.

PHOTO CAPTION

An Indian who fled his village due to cross border shelling shows an unexploded mortar shell that fell on his village, at a relief camp at Jhiri, some 14 miles from Jammu, June 14, 2002. Thousands of villagers have fled their homes close to the border due to regular cross border shelling, although some have started returning after India made tentative moves early this week to diffuse the crisis, moving its warships from Pakistan waters and reopening its airspace to Pakistan flights. (Arko Datta/Reuters)