U.S. Secretary of State Colin Powell began talks with Pakistan on Sunday after being rebuffed by India in a push for dialogue on Kashmir, a potential nuclear flashpoint between the South Asian rivals. Powell said before leaving India that the situation had "improved considerably" in the past month since the nuclear-armed neighbors drew back from the brink of war after a pledge by Pakistan to halt by Kashmiri nationalist fighters' infiltration into Indian Kashmir.

But he said it remained tense.

Pro-Pakistan Kashmiri nationalists continued to slip into India's Jammu and Kashmir state, though their numbers had fallen, he said.

"We look to India to take further de-escalatory actions as Pakistan makes good on its pledges to permanently cease support for infiltration," he told a news conference in New Delhi.

At the same time, he said: "It is important that infiltration comes to an end so that we can create conditions that will allow dialogue, to allow both sides to gain confidence in one another once again."

Powell, on his third South Asia peace mission since October, flew into India on Saturday after declaring his intention to seek talks -- or at least talks about talks -- on Kashmir, at the core of the seven-month-old standoff.

He made no comment after his talks with Indian counterpart Yashwant Sinha, who issued a rebuff to Powell on Saturday by suggesting India was not open to persuasion on talks.

Powell came to India calling for solid elections in Kashmir, expected to take place in September or October. He said he and Sinha discussed the need for free and fair polls and "international visitors to go and observe."

DIFFERENCES ON POLL MONITORS

But Sinha made clear India had a different view of the matter, saying that "those who are in Delhi" could go to the region during elections on an individual basis and that India had a "very independent election commission."

Powell met Prime Minister Atal Behari Vajpayee before going to Pakistan, where he met Junior Foreign Minister Inamul Haq and military ruler President Pervez Musharraf.

As he shook hands with Powell, Musharraf told reporters there was no infiltration going on and rejected Indian charges to the contrary as "absolutely baseless."

"I don't have to do anything, because we've already done it," he said.

Asked what he expected of India, he replied: "Our stand is very, very clear. We need to start a dialogue on Kashmir and all of the issues. That's what we want to see.

"The reciprocation and response from them is to initiate the process of dialogue on Kashmir."

Powell called on India to free political prisoners in Kashmir, saying they could "play a positive role in generating turnout." India has jailed several prominent Kashmiri politicians in recent months.

Powell said it was vital to ensure the elections took place in an "atmosphere of safety and peace" and said he would urge Pakistan to make "every effort to avoid disturbing" the vote.

A hardline pro-Pakistan Kashmiri nationalist group, Jamiat-ul-Mujahideen, threatened on Saturday to kill anyone taking part, saying they would be deemed traitors.

The Himalayan territory has been at the heart of tensions between India and Pakistan for decades. India controls just under half of Kashmir, Pakistan a third and China the rest.

Nearly a dozen armed Kashmiri nationalist groups are fighting Indian rule in Jammu and Kashmir state and tens of thousands of people have died since the revolt took off in earnest in 1989.

PHOTO CAPTION

Indian Prime Minister Atal Behari Vajpayee (R) and U.S. Secretary of State Colin Powell smile during their meeting in New Delhi July 28, 2002. The United States urged India on Sunday to take further steps to ease tensions in its military standoff with nuclear neighbor Pakistan over Kashmir. (Pawel Kopczynski/Reuter