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By Ashok Pahalwan

JAMMU, India, Nov 25 (Reuters) - Indian security forces on Monday shot dead two suspected Muslim militants who had attacked Hindu temples in Indian Kashmir, ending a bloody siege that cast a shadow over efforts to bring peace to the disputed region.

India blamed Pakistan-based militants for the raid, the deadliest attack in the worst weekend of violence since a new state government took power vowing to bring a healing touch to Kashmir. Pakistan condemned the raid as an "act of terrorism."

Police said the siege, in which 13 people were killed, ended when a lone surviving militant who had taken refuge in a house near the temples was shot dead.

Another militant was killed after Sunday's attack on the 150-year-old Raghunath temple and the nearby Rupyawali temple in Jammu, winter capital of Jammu and Kashmir state.

Underscoring the hostility between India and Pakistan over Kashmir, the Pakistani military said on Monday it had killed and wounded several Indian soldiers in the heaviest exchange of fire across a military control line in the region in recent days.

But political analysts said they did not expect the latest violence in the region to lead to a fresh crisis between the nuclear-armed neighbors.

Police chief A.K. Suri said nine civilians, one soldier and one policemen, along with the two militants, had been killed in the raids on the temples, while 52 people were wounded.

He told reporters a man who said he was from the banned Pakistan-based Lashkar-e-Taiba militant group had telephoned him claiming responsibility and threatening more attacks.

But despite a spate of violence since Friday in which more than 40 people were killed, Kashmir's new chief minister, Mufti Mohammad Syed, was expected to press ahead with his drive to ease tension.

Deputy Prime Minister Lal Krishna Advani blamed Pakistan for the temple raids, telling parliament that "terrorists being mentored from across the border...have struck again."

He linked the attacks to the release last week by Pakistan of Lashkar-e-Taiba leader Hafiz Mohammad Sayeed and also attacked Pakistan's Inter-Services Intelligence (ISI) agency, which India often accuses of masterminding militancy.

"Terrorist organizations are evil. Terrorist nations are even more evil. The world is not recognizing this," he said. "They must recognize that one of the biggest sources of terrorism is the ISI and the ISI is a part of the Pakistani establishment."

PAKISTAN CONDEMNS ATTACKS

In Pakistan, Foreign Ministry spokesman Aziz Ahmed Khan said Islamabad condemned the attack, as it had "always condemned acts of terrorism against civilians."

Sheikh Jameel-ur Rehman, secretary-general of the United Jihad Council, an alliance of Kashmiri militant groups, also condemned the attack and said it did not serve the cause of the group's mujahideen (holy warriors).

In Washington, the State Department said it was "shocked" by the attacks over the weekend, especially the temple attack.

"We condemn these latest instances of senseless violence. Violence will not solve Kashmir's problems nor will terrorism achieve the political goals of any group," spokesman Richard Boucher said in a written statement.

"These despicable attacks are further attempts to undermine the new state government, which is trying to reduce tensions and promote reconciliation. We encourage the Kashmir state government and the Indian national government to continue their efforts to resolve the Kashmir conflict through peaceful means," the spokesman added.

India has long accused Pakistan of sponsoring militants fighting a separatist rebellion against Indian rule in its only Muslim-majority state since 1989, a charge Pakistan denies. The neighbors nearly went to war in June.

But they have since begun pulling back troops from their border, and while analysts said they expected the temple attacks to raise tension, they saw no risk of a new military flare-up.

The bloodshed signaled the end of any honeymoon for Chief Minister Syed, who came to power after an election in September and October toppled the Abdullah family dynasty through which India traditionally ruled the state.

Omar Abdullah, leader of the opposition National Conference, was quick to blame Syed. "There is a signal that has gone across India. That the Mufti (Syed) government is soft," he said.

But Saifuddin Soz, a regional leader of the Congress party, which formed a coalition with Syed's People's Democratic Party (PDP), told reporters the government would stick to its plan.

"The PDP-Congress coalition government has a roadmap. We will continue to work to give relief to the people," he said. But he promised "there will be no compromise with terrorists."

CHALLENGE TO NEW GOVERNMENT

Syed's best chance of success is to win over Kashmiris, alienated by what some see as excesses by security forces, in order to isolate the rebels and reduce their support. But he will have to tread a fine line between this and showing signs of weakness that might embolden the militants.

"This violence is aimed at destroying the Mufti government. This kind of activity will compel him as chief minister to act tough, otherwise his credibility will go down," said former foreign secretary J.N. Dixit. "Once he does that then militant groups will say he is no different from other leaders."

Although still pro-Delhi, Syed has freed leading political prisoners as part of efforts to open peace talks and ease a 13-year-old rebellion that has killed at least 35,000.

Three rebels were killled on Monday in a day-long gun battle east of Jammu, an Indian defense official said. 

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