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LONDON, May 28 (Reuters) - President Pervez Musharraf said Pakistan wanted peace with honour and warned that war with India would be no easy victory for either side.

"There's no walkover here by any side. I am sure the Indians also know that," he told the Financial Times in an interview published on Tuesday.

Tough comments by the Pakistani leader in a national television address on Monday risked aggravating tensions with India in a face-off between the nuclear armed foes over disputed Kashmir. He said Pakistan would fight with full force if attacked.

Musharraf, speaking to the Financial Times immediately after his broadcast, said: "Sanity demands avoidance of war, but at the same time in the pursuit of peace you can't compromise on honour and dignity so one has to strike a balance between maintaining honour and dignity and going for peace also."

"While I do not want war, I am not scared of war. However the avoidance of war cannot come at the cost of sacrificing our honour and dignity," he said.

Musharraf denied that there was any cross-border "terrorist" infiltration of India's portion of Kashmir.

"I do not accept any figures that the Indians give. I am clearly saying that nothing is happening on the Line of Control now," he said. "Those who accuse us cannot be allowed to sit in judgment on us."

The two estranged neighbours have been locked in a tense standoff since December's bloody attack on the Indian parliament which New Delhi blamed on Pakistan-based Islamic militants.

Tension soared further after a May 14 raid in Indian-ruled Kashmir in which more than 30 people were killed. India again accused Muslim militants fighting its rule in the disputed Kashmir region for the attack.

The two nations have gone to war three times since independence from Britain in 1947, twice over Kashmir. 

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