The casualties came despite indications that tensions between the two nuclear-armed rivals were easing.

Officials said all the deaths occurred in Samahni and Chamb sectors in southernmost Bhimbher district.

Samahni sector has been subjected to an unrelenting bombardment from Indian troops across the Line of Control -- the de facto border dividing the disputed Himalayan region -- since the artillery duels erupted in mid-May.

Its adjoining Chamb sector has been quiet for the past few days, but authorities said shelling resumed there late Monday.

Local official Khalid Mahmood said four people from the same family were killed in Manana Dheri village on the outskirts of Samahni town in Samahni. The 90-year-old grandfather was injured in the incident.

One of the victims was a reporter for an Urdu-language Pakistani newspaper, he added.

In Chamb sector, a 60-year-old man was killed and a woman injured in Nali village, Mahmood said. Intermittent shelling continued during the morning in both sectors.

Officials in Muzaffarabad said the shelling continued past midnight in Hajira and Abbaspur sectors in the southern Poonch district, injuring seven people including two children and a woman.

In the neighbouring district of Bagh, one person was killed and two others, including a young girl, were injured.

The overnight deaths have pushed the toll in Indian shelling on the Pakistani side of Kashmir to 98 since May 15.

In other developments, Pakistani President Pervez Musharraf on Tuesday called on India to take more "substantive steps" to defuse the tension between the two nuclear-armed neighbours.

"We are watching for more substantive actions from their side," to initiate dialogue on the Kashmiri dispute, Musharraf told a press conference in Abu Dhabi.

"We expect substantive steps from India now," he said after New Delhi's decision to allow Pakistan to resume civilian flights over India.

"It's a very small beginning, let's see what happens in the future," Musharraf said of the overflights. "Whatever they are doing is easing their own problems."

Musharraf, who was to visit Saudi Arabia later Tuesday, added that he was optimistic that the tension with India could be defused.

"I am an optimist, there is a chance," if "the core dispute (on Kashmir) and all other irritants (are addressed) in a spirit of sincerity and sovereign equality," he said.

India has begun withdrawing warships from near Pakistani waters in a further bid to ease the crisis, sources in New Delhi said.

And New Delhi has begun the process of appointing a high commissioner (ambassador) to Islamabad as further proof that it is seeking an end to the current dangerous military stand-off.

As a first step to defusing the crisis, which has seen a buildup of a million soldiers on both sides of the border, New Delhi on Monday announced it was restoring overfly rights for Pakistani civilian aircraft.

Further underscoring attempts by India to dampen the heat, was the decision to begin withdrawing warships from near Pakistani waters in a further bid to ease tension with its neighbour ahead of the arrival here late Tuesday of US Defence Secretary Donald Rumsfeld, sources said.

New Delhi has also begun the process of appointing a high commissioner (ambassador) to Islamabad as further proof that it is seeking an end to the current dangerous military stand-off between the nuclear-ready rivals, other sources said.

As a first step to defusing the crisis, which has brought a million soldiers from both sides eyeball-to-eyeball across their common frontiers, New Delhi on Monday announced it was restoring overfly rights for Pakistani civilian aircraft.

Foreign ministry spokeswoman Nirupama Rao told reporters that the step was in recognition of Islamabad's efforts to rein in Pakistan-based Islamic militants plotting attacks on Indian targets.

The overflight ban was imposed along with a series of diplomatic sanctions after a suicide attack on the Indian parliament in December which New Delhi blames on Pakistan-backed militants.

While the government has yet to announce the withdrawal of the warships, defence sources told AFP the process would start Tuesday.

"Only naval ships patrolling the Arabian Sea are being moved back," the source said. "It will take one or two days and start today."

"These measures are being taken in response to the changing security situation," he added.

Last month the navy had moved five warships, four of them carrying missiles, to the Arabian Sea from its eastern seaboard amid a stand-off with Pakistan that sparked fears of all-out war.

The already-simmering tensions were ratcheted up further last month when militants struck at a military camp in Indian Kashmir, killing 32 people -- mainly families of Indian soldiers -- before they were themselves gunned down.

US Secretary of State Colin Powell on Monday welcomed an apparent easing of tensions between India and Pakistan, but warned the crisis was far from over.

"We are pleased that as a result of intensive diplomatic efforts ... we have begun to see some relaxation in the tension," Powell said in a speech to the US Asia Society in New York.

"This is a step down the ladder," he said, referring to the lifting of the ban on overfly rights.

"We are still in a period of crisis and the situation is still very tense," he added, highlighting the continued presence of war ready troops on the India-Pakistan borders.

Washington has taken a major role in coordinating the international effort to pull India and Pakistan back from the brink of war.

Last week Powell's deputy, Richard Armitage, paid visits to both Islamabad and New Delhi in the course of which he wrung from Pakistan a pledge to halt insurgency and from India a commitment to take steps to reduce tension.

He is to be followed by Rumsfeld, who is due in New Delhi late Tuesday after a tour which included stops in the Gulf and in Europe, US officials said.

Rumsfeld is expected to head for Islamabad on Wednesday afternoon following meetings with the Indian leadership in the morning.

Pakistan has given a cautious welcome to India's announcement that it re-opened its airspace to Pakistani overflights but said dialogue with New Delhi over Kashmir is essential for a longer-term solution to the crisis.

Foreign office spokesman Aziz Ahmed Khan said there had been a "discernible" improvement in relations with India but that the situation was still volatile.

"The first step to de-escalate the situation would be to disengage the forces from the border," he told a press conference in Islamabad on Monday.

Biman Mukherji in New Delhi contributed to this report Related Links
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