Trying to navigate between A diplomatic Scylla and Charybdis, India might be facing the worst of both worlds-a defiantly terrorist Pakistan and a victorious US in the mood to see India sweat after Delhi turned against it on Iraq.

India's problems with Pakistan are set to heat up this summer and Delhi holds Washington's conciliatory policies on Pakistan partly responsible. Taking a leaf out of the US' book, Delhi even has some unilateral action plans up its sleeve after high-level intelligence reports pointed to the presence of 1,200-1,500 jehadis along the loc. But after opposing the US on Iraq just when it had won the war, India will need to do a lot of damage control for some much-needed diplomatic ballast.

THREE IS A CROWD: The US wants Musharraf (above) to stay; Vajpayee's (below) "middle path

India's pique peaked after the US State Department asked for a resumption of dialogue with Pakistan the day after the March 24 Nadimarg massacre. Indian reaction was instant and sharp, with increased rhetoric against the US and Pakistan. Indian leaders got carried away and only succeeded in upsetting India's equation with the US on its action in Iraq. Deputy Prime Minister L.K. Advani declared that truth was not on the side of the US, while Foreign Minister Yashwant Sinha's equating Iraq and Pakistan ("Pakistan is a fit case for pre-emptive strikes") attracted instant retribution from the US.

It was India's attempt at coercive diplomacy, but it didn't work. Instead, it complicated matters with the US enough to warrant a damage-control exercise. Sinha might have to "explain" things to US Secretary of State Colin Powell while National Security Adviser Brajesh Mishra prepares to travel to the US to ease the "discomfiture" in the Bush Administration.

Last year, Mishra's talks with US counterpart Condoleezza Rice led India to believe it had once and for all broken the US habit of yoking India and Pakistan together. India, he said, would deal with Pakistan on its own terms. The strategy: no dialogue but heightened security, better intelligence and more strikes on militants. The US also assured Advani it would get Pakistan to hand over the list of 20 terrorists, without success.

India had other reasons to expect a better deal from the US. The "middle path" advocated by Mishra and Vajpayee on Iraq was partly driven by the desire to provide an incentive to the US to help keep Pakistani terrorism in check.

This strategy worked well until February, specially during the Jammu and Kashmir assembly elections when the US kept Pakistan on a leash and the Hurriyat at bay while India conducted a credible election. But the strategy slipped out of India's grasp because it depended on the US continuing with its pressure tactics on Pakistan. This did not happen.

The ease-up was evident when Pakistan released jehadi leaders like Hafiz Saeed and returned to regrouping terrorist bands to strike India and Afghanistan. The list of 20 remained in Pakistan. India believes Islamabad is extending limited cooperation to the US by only handing over Arab Al-Qaida elements, while protecting domestic terrorists. This way, it can continue supporting the US war on terror while winking at terrorist operations by jehadi groups in Kashmir

When the North Korea-Pakistan WMD nuclear link was exposed last year, the US responded in March with sanctions on the A.Q. Khan Research Laboratories (KRL), Islamabad, which were perceived to be more cosmetic than real. KRL, Indian officials insist, is not an independent entity but is at the heart of Pakistan's nuclear programme. Yet a phone call from President Pervez Musharraf and the US modified the order "for a specific missile-related transfer", as the State Department put it. This was clearly a pre-emptive action to prevent Pakistan coming under more comprehensive sanctions under the US Symington Amendment, which prohibits economic assistance and military aid unless the President certifies that Pakistan has not obtained any nuclear-enriched material.

India's disappointment was compounded by the lavish infusion of US funds into Pakistan. To reward its ally, the US has paved the way for $1.5 billion in new grants, more than $5 billion in loans and rescheduling of $12.5 billion in bilateral debt with the Paris Club. Last week, the US announced it had waived $1 billion of Pakistan's debt; the remaining $2.3 billion was rescheduled over 38 years.

India is convinced that whatever "pressure" the US puts on Pakistan to stop cross-border terrorism, it will always fall short of what is required. The only pressure Pakistan will obey is economic but the US is loath to apply that. This is not merely to reward Musharraf for being a staunch ally-he was even seen managing his domestic pressures during the Iraq war-but primarily because the US wants Musharraf to remain in power.

Adding insult to injury, Shirin Tahir-Kheli, a Pakistani-American, was quietly appointed senior director in the US National Security Council three weeks ago. Although she will be looking only after democracy issues, it is a diplomatic setback for India. More recently, UN Secretary-General Kofi Annan named Pakistani Rafeeuddin Ahmed as his pointsman for Iraq-definitely not music to the Indian ears.

The final straw for India was the American prescription for dialogue on March 25. The sharp Indian reaction led the US to remedy matters with a Powell-Jack Straw joint statement a week later. Consequently, US officials believe India lashing out at them is somewhat unjustified. The joint statement they point out, endorsed many of India's positions and for the first time held Pakistan responsible for the terrorist acts in Kashmir, and the need to respect the loc. However, they too privately admit to goofing up on the first statement by the US State Department.

So how does India "subdue" a more terrorism-minded Pakistan? Confusion reigns in the Indian establishment about how much it wants to involve foreign powers specially in the aftermath of the US experience. "It is flogging a dead horse," said a senior official. Military strikes against Pakistan, though an option, is not being considered at present, the basic reason being that the overwhelming military asymmetry that exists between the US and Iraq is not in evidence here.

In the immediate term, India is considering two options: conduct special forces operations against Pakistan-based terrorist camps and intervene in Pakistan's internal politics. Its most benign form will be to promote democracy in Pakistan, again taking a leaf out of the US book. It will be a challenge to avoid engaging the regime while actively encouraging people's participation, but this is increasingly part of the Indian strategy on Pakistan. It also provides a ready reason for India not holding talks with the military regime-thereby denying it the much-needed legitimacy as India's official dialogue partner, as crucial as being a friend of the US.