DELHI ON WARY TACK WITH ISLAMABAD, MULLING TALKS

C O N F I D E N T I A L SECTION 01 OF 05 NEW DELHI 006150

SIPDIS

E.O. 12958: DECL: 08/04/2015
TAGS: PREL PGOV PBTS ECON PTER KDEM KISL MOPS PK IN INDO PAK
SUBJECT: DELHI ON WARY TACK WITH ISLAMABAD, MULLING TALKS
WITH KASHMIRIS

REF: NEW DELHI 5925

Classified By: Political Counselor Geoff Pyatt for Reasons 1.4 (B, D)


1. (C) SUMMARY: Despite mounting political concern about
increased infiltration across the Line of Control (LOC),and
BJP sniping over the UPA government's failure to hold
Pakistan accountable for terrorism in India, the GOI's top
leadership has remained committed to forward progress in the
Indo-Pak peace process. This is evident, for instance, in
the GOI's positive spin of the modest progress in the August
6 talks in Delhi on nuclear confidence building. That said,
our contacts say the GOI harbors no illusions about its
neighbor, and the security services in India are pushing
Manmohan Singh to consider "unconventional" methods to remind
Pakistan that India is not "fooled." In a recent media
interview, NSA Narayanan went public with his warning that
dialogue with Pakistan "would evaporate" in the event of a
major terrorist strike, and DefMin Mukherjee told Parliament
terrorists remained ready for infiltration from camps across
the LOC. A glimmer of hope has emerged, however, on the
Delhi-Srinagar axis, with some here saying the GOI has begun
to consider the possibility of starting talks with the
Hurriyat and others in Kashmir. However, local hawks
question even that strategy, saying the Hurriyat are not
worthy of Delhi's respect or engagement. Cooler heads are
prevailing for now, but in India's democratic system, popular
perceptions of Pakistani performance on terrorism will impact
significantly the PM's room to maneuver. END SUMMARY.

TERRORIST SURGE SPIKES REDEPLOYMENT PLAN
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2. (C) Conversations with a variety of Delhi-based Pakistan
observers suggest a consensus that, while the GOI is still on
the rapprochement track, it is finding itself under
increasing pressure. Ayodhya and recent terrorism in
Srinagar have complicated its stance, as has the rising tide
of infiltration. Two weeks ago, after a spike in incursions
in the Gurez sector, Army chief of staff JJ Singh poured
water on press reports that the Pakistani government was
responsible. On August 5, however, the senior Army corps
commander in the Kashmir valley, SS Dhillon, told the BBC
that Pakistan was failing to honor its commitments to stop
infiltrations. Referring to the increase in infiltrations
and terrorism, Defense Minister Mukherjee told Parliament
August 3 that "recent reports indicate a large number of
launching camps along the LOC have been activated where
militants have been kept in readiness for infiltration."
A.K. Suri, Director General of the 70,000-strong Railway
Protection Service and former head of the J&K police, told us
this summer's violence has caused a huge setback. If
Pakistan had "behaved moderately" India would have removed a
regular Army division from Kashmir. Instead, the GOI will
add more Rashtriya Rifles battalions. N.N. Vohra, the Home
Ministry's titular point-man for talks with the Hurriyat,
echoed Puri, saying that the rise in terror had delayed -- if
not ended for now -- government plans to withdraw troops from
the Valley and reduce remaining troops' daily contact with
civilians. These sentiments reflect a shift in Indian
thinking that is starting to solidify, and could harden.

NARAYANAN: DON'T CROSS THRESHOLD; DIALOGUE COULD COLLAPSE
-------------- --------------


3. (C) Even NSA Narayanan is getting into the act, saying
publicly what he has only said privately before. In an early
August India Today interview, Narayanan said terrorism
against India had increased its "quality" and
"sophistication" and that religious targets and commercial
centers were vulnerable, including the RSS headquarters and
Infosys offices in Bangalore. Narayanan clarified that, "I
am not blaming all this on Pakistan, but you cannot run an
operation of this scale without ISI backing. Definitely the
attack in Ayodhya where the LeT was involved was; Lashkar is
a creature of the ISI." To answer critics of the
government's approach, Narayanan added that, "a soft answer
turneth the wrath away," but added that the PM had mentioned
cross-border terror in his July 29 phone call with President
Musharraf. Narayanan concluded by saying, "We have warned
Pakistan there are certain thresholds and if they are crossed
the entire thing collapses. President Musharraf has invested
very heavily in this dialogue. He is worried if it collapses
as a result of something of this kind then he does not have a
leg to stand on internationally and here. The PM is using
this card...if an incident like Ayodhya had turned out
otherwise, all dialogue with Pakistan would have evaporated."


PUTTING A BRAVE FACE ON THINGS
--------------


4. (C) However, our interlocutors -- including Vohra -- told
us that the PM and Sonia Gandhi recognize that Indo-Pak
rapprochement is good for India, good for the economy, good
for votes, and generally supported. Former High Commissioner
to Islamabad G. Parthasarathy, an informed member of FM
Natwar Singh's kitchen cabinet, said the PM and Sonia
recognize they have no choice but to move forward. Yousef
Tarigami, an influential J&K MLA who meets regularly with the
PM and Sonia, agreed that the current UPA leadership has to
resist pressure from security hawks at the bureaucratic
level, and that he continued to urge them to move forward
with dialogue on the Srinagar-Delhi axis as well as
Delhi-Islamabad. Recognizing that publics on both sides want
peace more than confrontation, confidence building measures
continue apace, missile test pre-notification talks took
place August 5 and 6, new road openings are mulled, the
overall atmosphere of statements at the senior level remains
upbeat, Musharraf-Singh phone calls take place, the UNGA
summit meeting between the two leaders is on track, and
people-to-people efforts are expanding. At the same time,
the security agencies are increasingly fed-up with what they
perceive as a growing gap between President Musharraf's
rhetoric post-London and the reality of what they see on the
ground. The skeptical voices are increasingly hard for the
government to ignore, and Parthasarathy warned us another
terrorist strike could put real pressure on the PM to take
"unconventional" measures to remind Pakistan of its
commitments. Vohra and Suri echoed this frustration within
the intelligence services. Parthasarathy commented that,
with India, "Musharraf has seen that he can talk peace while
bleeding us at the same time." Nevertheless, he insisted
that "the tolerance threshold in India is very large, unless
something big happens."

CHOPPY POLITICAL WATERS
--------------


5. (C) The BJP is also questioning the PM's attitude toward
Pakistan. Former BJP FM Yashwant Sinha published an article
in the Hindustan Times in which he asked why the government
was continuing to engage with Pakistan despite mounting
evidence that terrorism continued. Parthasarathy argued
Vajpayee had to have been behind the article. Surprisingly,
he also said the PM's statement that terrorism would not
impact the peace process were unhelpful because "they give
Pakistan more leeway. US support for Pakistan has given the
military there the sense that they do not need to compromise
on strategic issues," Parthasarthy explained. The BJP took
this up in an July 23 statement in which they attacked the
government's "confused" response and "ambivalent approach "to
cross-border terrorism, and even cited Defense Minister
Mukherjee's own statements about the continued existence of
terrorist training camps across the border. The BJP
complained that the "complete lack of coordination, total
confusion, and lack of direction" on terrorism was
"destructive of national will (sic)," and urged the UPA at
"the very minimum" to insist Pakistan act against the
infrastructure of terrorism. The BJP also harped on the
government's response to the Ayodhya attack. N.N. Vohra
explained that the up-tick in terrorism had indeed slowed the
government's desired pace of implementation of
confidence-building measures largely because India was a
democracy and the political opposition had expressed its
outrage at the continued assault against India. Vohra added
the PM and Sonia had no choice but to recognize the political
climate domestically in determining how fast to move ahead
with Pakistan.

GENERAL DESIRE FOR PEACE (WITHOUT DAILY DIET OF TERROR)
-------------- --------------


6. (C) Saeed Naqvi, a senior Muslim journalist, maintains
that the "mainstream thinks that bilateral moves should be
given momentum" and that India "must carry on regardless."
The CBMs and increased interaction of the last year has
created constituencies in Pakistan and India, he insisted,
that support peace. The LOC ceasefire between the militaries
is holding, he said, but Naqvi was unsure whether Musharraf
could control the terrorism in Kashmir. He added that if the
peace progress is terminated, there will be no route for
Pakistani moderates. Instead, extremists will have more room
to function, which would lead to a "dangerous militant
state." Naqvi claimed that Manmohan Singh more or less
trusts Musharraf, and both he and Sonia sincerely want peace.
The BJP, seeking ammunition, charges the PM with being soft
on terrorism, but "peace with Pakistan has a wider
endorsement in society." If the Congress could make progress
with Pakistan, Naqvi argued that would overcome the recent
hub-bub about relations with the US. Sonia and the PM have
their heart in the right place, but also know that Congress
needs a deal with Pakistan to help them electorally in 2009.

THE BEGINNINGS OF A SHIFT TOWARD DIALOGUE WITH KASHMIRIS?
-------------- --------------


7. (C) Interestingly, Saifuddin Soz, a Congress MP tapped by
the PM to talk to the Hurriyat, said Delhi has decided to
send feelers to the Hurriyat and others in Kashmir to see if
talks could start. He stressed that Delhi has set no
political parameters and had not developed internal
strategies. All the PM wants is to see if the Hurriyat would
come to Delhi so he can test their seriousness. We confirmed
with a Hurriyat member in Srinagar that Soz had indeed made
an initial approach, and that the Hurriyat was considering
how to respond. A Kashmiri lawyer close to the Hurriyat,
Ashok Bhan, also confirmed that there is some initial signs
of movement in the Delhi-Srinagar dynamic. N.N. Vohra, who
has been idle lately as talks between Delhi and the Hurriyat
flagged, met the PM on August 5, although we hear from some
that the PM did not convoke him; rather, he asked the PM for
a meeting to find out if he was to be relevant again. He
told us August 8 that there were some signs that Delhi might
again talk to the political tendencies in Kashmir, especially
once the Monsoon session of Parliament ends on August 25, but
the security climate was bad and the PM faced political
pressure from the BJP and his own security hawks. Vohra also
made the point that India, as a democracy, had a hard time
engaging with Hurriyat leaders who had never been elected to
anything. Nonetheless, he said, the will was there to talk
to them.


8. (C) In the midst of this interesting hubbub, police
officer AK Suri (protect) told us that many in the RAW, IB,
and police are pressuring the PM and his advisors not to
engage the Hurriyat since, in their view, they are
increasingly marginalized and politically unnecessary to
Delhi's interests. Our contacts lamented what one called the
PM's "structural flaw" in that he doesn't have a "Kashmir
guy." NSA Narayanan, said one, is "a suspicious cop" and
"has no vision." TK Nair is a "low-key Principal Secretary"
and media adviser Sanjay Baru is only excited about
economics. All the PMO staff are bureaucrats, they said;
none are politicians with vision. To prevent the bureaucracy
from springing back to its anti-Pakistan modus operandi, said
one contact, the PM must constantly express his political
will. Tarigami, too, insisted that status quo in Kashmir is
not the answer, that mounting impatience in Delhi was fueling
hard-line Hurriyat leader Geelani's increasing influence, but
that the mood in the Valley still firmly backed peace
(reftel). Tarigami said he is urging the government to start
any kind of dialogue right away, but the nature of coalition
government hinders the PM's ability to act decisively.

PAYBACK IN THE PUNJAB?
--------------


9. (C) Naqvi told us that "trust begets trust" and Musharraf
has lost credibility over the last few weeks, as the
terrorist incidents in Ayodhya, London and Egypt have led to
doubt's about Musharraf's commitment to cracking down on
terrorism. Yet, he has kept terrorist activity in reserve to
use as a bargaining chip against India. Since Musharraf
knows he is being watched in Kashmir, and that violence as a
political weapon has lost its effectiveness there, Naqvi
speculated that Islamabad may be "turning it up in the Punjab
through Sikh terrorism." Vohra, too, said Pakistan harbors
Khalistani terrorists in Lahore and other areas with
important Gurudwaras, and that there had been some rise in
"mischief" in Indian Punjab, but he said the politics there
are different from the 1990s. Interestingly, one also does
not find this same level of concern about terrorism in Punjab
itself (septel).

COMMENT: THE PM IS FEELING THE PRESSURE
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10. (C) COMMENT: Despite the GOI's positive spin on recent
composite dialogue talks, the political vibe in Delhi is
increasingly gloomy as people become convinced Pakistan is
reverting to its old ways. While there is a glimmer of light
in the internal Kashmir dialogue, even that process is only
just beginning and could be extinguished by additional acts
of terror. The PM is committed to rapprochement with
Pakistan, but doubt is seeping into the Delhi consciousness,
and the security establishment, especially if another big
attack occurs, could play a spoiler role. The barometer of
the relationship is terrorism, and so far, this has been a
long, hot summer for India. If the public mood sours, the PM
will, in democratic fashion, have to bow to their will. END
COMMENT.
BLAKE