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WASHINGTON, March 27 (AFP) - Alarmed by a spike in tensions between India and Pakistan, the United States and Britain called on the South Asian nuclear rivals to immediately strike a ceasefire in the disputed region of Kashmir.

Clearly concerned about an escalation in hostilities at a time when the focus of their attention is the war against Iraq, Washington and London renewed offers to work with both sides to help prevent a new crisis from erupting.

"Both sides should consider immediately implementing a ceasefire and taking other active steps to reduce tension including by moves within the SAARC context," US Secretary of State Colin Powell and British Foreign Secretary Jack Straw said in a joint statement.

The reference was to the South Asia Association of Regional Cooperation which groups Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.

The statement, released after an Iraq-dominated meeting between US President George W. Bush and British Prime Minister Tony Blair, said the differences between India and Pakistan could only be resolved "through peaceful means and engagement."

"The United States and the United Kingdom stand ready to help both countries start a process aimed at building confidence, normalizing bilateral relations and resolving outstanding differences, including Kashmir," they said.

The latest rise in tensions was sparked by a March 24 attack in Indian Kashmir in which 24 Hindus were massacred. New Delhi has alleged Pakistani involvement in the incident, a claim refuted by Islamabad which has called for an independent investigation.

While careful not to apportion any blame for the massacre, Powell and Straw condemned the massacre and said Pakistan needed to fulfill pledges to halt raids by Muslim militants across the so-called "Line of Control" (LoC) that separates Indian and Pakistani Kashmir.

"Nothing can justify such a vicious and cowardly act," they said, adding that violence would not solve the problems in Kashmir, India's only Muslim-majority state.

"Pending the resolution of these problems, the LoC should be strictly respected and Pakistan should fulfill its commitments to stop infiltration across it," Powell and Straw said.

"Pakistan should also do its utmost to discourage any acts of violence by militants in Kashmir," they added.

India accuses Pakistan of fomenting unrest in Kashmir, divided between the two countries and claimed by both.

Pakistan denies the charge but says it extends moral, diplomatic and political support to what it calls Kashmiri's right to self determination. 

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