India has cancelled talks with Pakistan after accusing it of interfering in India's internal affairs.
It comes after Pakistan's high commissioner in Delhi consulted Kashmiri separatist leaders ahead of the talks, which were agreed in May.
The two countries' foreign secretaries were to meet in Islamabad to discuss the resumption of formal dialogue.
Pakistan described the Indian decision as a "setback".
"It is a longstanding practice that, prior to Pakistan-India talks, meetings with Kashmiri leaders are held to facilitate meaningful discussions on the issue of Kashmir," a statement from the Pakistani Foreign Ministry said.
Relations seemed to be on the up when new Indian Prime Minister Narendra Modi invited his Pakistani counterpart to his swearing-in ceremony.
But, say correspondents, the cancellation is an indication of the tough new approach adopted by his government towards Pakistan.
Last week Mr Modi accused Pakistan of waging a proxy war against India in Kashmir.
Pakistan's High Commissioner Abdul Basit announced plans to meet Kashmiri separatists in Delhi.
The Indian Foreign Secretary Sujatha Singh warned Mr Basit against it, saying he could either have a dialogue with India or talk with the separatists.
India reacted with fury when it became clear the Pakistani envoy had gone ahead with the consultation.
India's Foreign Ministry spokesman Syed Akbaruddin said Delhi told Mr Basit "that Pakistan's continued efforts to interfere in India's internal affairs were unacceptable".
He added that the action "raises questions about Pakistan's sincerity and undermines the constructive diplomatic efforts" initiated by India.
"No useful purpose" would be served by the Foreign Secretary's visit to Islamabad, the spokesman said.
Reports said Mr Basit was scheduled to meet more Kashmiri separatist leaders.
The United States has described the cancellation of talks as "unfortunate". A State Department spokesman said it was "important that both sides still continue take steps to improve relations".
India has long accused Pakistan of sponsoring militants in the disputed region - though despite a recent spike, overall the violence has declined since the early 2000s. Relations plunged again over the deadly 2008 Mumbai attack.
Claimed by both countries in its entirety, Kashmir has been a flashpoint for more than 60 years. The South Asian rivals have fought two wars and a limited conflict over the region.
Following are some observations in view of the ongoing situation:
1. The cancellation of bilateral talks by India is indicative of a lack of trust and understanding. Also a reflection of utter immaturity on the part of the new Indian leadership. Instead of reaching out to the Pakistan High Commission at the official level and requesting to have an exchange of views on the issue of Kashmir, it has decided to close the doors.
2. At the oath taking ceremony of the new Indian Prime Minister, leaders of both countries stated their desire to re-establish the bilateral relationship on a new level in the benefit of the people of both nations.
3. How difficult is it to understand that Pakistan and India as nuclear powers sharing a common border and history; they have no other option but to sit and discuss the issues including Kashmir. Who in a sane mind would suggest measures other than peaceful negotiations to reach settlements.
4. India, by taking this measure has not only jeopardized the newly instituted peace efforts, but also displayed to the international world that it is in fact not willing to offer a hand of friendship to its most important neighbor, with which, it has far better chances of promoting trade, commerce, banking and multitude of bilateral development projects.
5. Even from a moral standpoint, Pakistan and India's support to each other in international forums like the United Nations would mean building bridges of peace even with India's other smaller neighbors like Bangladesh, Nepal, Bhutan and Sri Lanka.
6. Good relations between the two would usher in economic opportunities within the region of South Asia, which will eventually benefit the world. Establishment of peace and security will be an added benefit among so many others.
7. Since the past two to three months the Border Security Forces of India have resorted to unprovoked firing and shelling at the border villages of Sialkot, Pakistan, resulting in innocent deaths of civilians on the Pakistani side. In fact, due to the intensity of ceasefire violations by India, the border villages of Pakistan are being evacuated, moving the villagers and their livestock away from the range of the Indian shelling.
What kind of a message is the Indian government trying to convey to Pakistan and to the world. It knows that provocation and military conflict are not the answer to establish peace in a volatile and insecure region. When the dark clouds of terrorism are hovering over the globe and threatening the delicate balance of peace, the world does not need a Pakistan-India military conflict. The United States has always taken the lead to assuage tensions between the two sides. The U.S. Government should contact both governments at the highest level and urge them to open their doors to negotiations immediately. However the onus of responsibility should be shared by India more than Pakistan, owing to its geographical size, military power and standing in South Asia.
Dawn News August 19, 2014
BBC News August 19 & 20, 2014