ISLAMABAD, Pakistan - Completing a shuttle-diplomacy mission across south Asia, Defense Secretary Donald H. Rumsfeld said yesterday that the leaders of both India and Pakistan were "concerned and determined" to reduce tensions, and he called for a resumption of dialogue between the two nuclear rivals.

"I think that progress is indeed being made," Rumsfeld said after talks with President Pervez Musharraf of Pakistan over ways to halt the violent standoff over the disputed region of Kashmir, which just days ago seemed on the verge of becoming a full-scale war.

Assessing talks on Wednesday with senior officials in India and his meetings here yesterday, Rumsfeld said that the world was witnessing "leadership that is concerned and determined that steps be taken to de-escalate the tension."

But he noted with concern that the militaries of both nations remain on high alert and that miscalculation could destroy recent tentative steps toward accommodation. And he said that increased diplomacy between the two would be necessary to resolve the issue.

"Countries need to talk to each other," Rumsfeld said.

Sporadic firing punctured the relative calm on the India-Pakistan frontier yesterday. Overnight shelling in Kashmir killed five people, local officials said.

But by early afternoon yesterday most areas along the Line of Control dividing the disputed Himalayan region were relatively quiet - a sharp break from the heavy firing between the two armies over the past month.

The growing tensions between India and Pakistan forced the Bush administration to confront what previously had been an unshakable but lingering concern in its pursuit of a global campaign against terror: What should the administration do when two important allies swap accusations of terrorism?

In its anti-terrorism effort, the Bush administration has sought help from dozens of longtime military partners and struck alliances with scores of new ones. In some cases, most notably India and Pakistan but also between Armenia and Azerbaijan, these coalition partners have the dead bodies and wounded pride as proof that acts of terrorism may even now push them toward conflict and weaken the U.S.-led effort to combat terror.

The leadership in New Delhi portrays itself as the injured party, and has astutely captured President Bush's own rationale for the U.S. fight against terror when it describes how vicious strikes by militants crossing from Pakistan give India the right to respond, and even attack preemptively, to deter future bloodshed on its soil.

At the same time, Pakistan is a U.S. ally on the front line of the offensive to capture or kill al-Qaida fighters. Pakistani bases and airspace were indispensable for carrying out the war in Afghanistan; its troops still press al-Qaida along the Afghan border; its law enforcement authorities continue to round up terror suspects in the country.

U.S. officials, while stating that there is no hard intelligence to prove that al-Qaida-linked fighters are operating in Kashmir, nonetheless point out how promoting tension between Pakistan and India could divert forces and ease the plight of their terrorist comrades seeking to regroup along the Pakistani-Afghan border.