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SRINAGAR Monday (AFP) Two months of warming ties with Pakistan have been "set back" by a rebel attack on an army camp in Indian Kashmir that left 14 people dead, an Indian official said Sunday as violence surged in the divided province.

Another official, however, tempered his colleague's comments, insisting India would still push for peace, a day before Pakistan was due to send a new ambassador to New Delhi in the most visible sign yet of reconciliation after last year's military stand-off.

Junior home minister Harin Pathak, visiting the sprawling Sunjjawan base that two Islamic militants stormed into Saturday, said Pakistan must do more to curb rebels fighting for 14 years here against Indian rule.

"Saturday's fidayeen (suicide) attack ... is a setback to the peace process initiated by Prime Minister Atal Behari Vajpayee in Srinagar," Pathak told reporters. "Pakistan has to stop aiding cross-border terrorism if it wants bilateral talks to begin," he said. "Resumption of India-Pakistan talks depends on the attitude of Islamabad."

The two rebels broke into the camp outside the winter capital Jammu early Saturday when soldiers were still asleep, setting off a four-hour gunbattle in which 12 soldiers and the two assailants died. It was the deadliest single attack in Kashmir since Vajpayee visited the summer capital Srinagar on April 18 and offered a "hand of friendship" to Pakistan to end more than a year of crisis-level tensions.

The two countries have since agreed to restore road and diplomatic links, with Pakistan's new envoy, Ahmed Aziz Khan, due in India Monday.

Another Indian junior minister for home affairs, I.D. Swami, said the attack was the work of "certain elements" in Pakistani Kashmir "who always try to sabotage all peace moves."

"I don't think such attacks are going to deter the determination of the central government and the step Prime Minister Atal Behari Vajpayee has already taken, which has been praised all over the world," Swami told the Press Trust of India news agency.

Indian observers noted that New Delhi never expected a complete halt to violence when relations with Pakistan began warming.

Sources in the Indian capital said New Delhi might overlook the incident if Pakistan showed it was ready to proceed on other issues including a resumption of air links and a stalled regional trade pact.

C. Uday Bhaskar, deputy director of the Institute of Defence Studies and Analyses, a government-funded think tank, said: "The test of the India-Pakistan initiative is the way they respond to such incidents. Pakistan's reaction to this incident is the indicator of sincerity that Pakistan brings to the table."

The little-known al-Naseereen rebels claimed responsibility for the attack on the army camp, according to the local Urdu-language newspaper al-Safa.

Meanwhile in a fresh surge of violence around Kashmir, 16 people were killed overnight and Sunday, including five by suspected Islamic militants and two rebels who were allegedly trying to cross the de facto border with Pakistan, police said.

A police spokesman said the dead included Ghulam Hassan, a village chief and worker for the province's ruling party, and Azam Khan, a member of the pro-Indian militant group Ikhwan.

The chief of India's army, General Nirmal Chandra Vij, also visited the Sunjjawan camp Saturday, touring the hospital and meeting injured soldiers.

Vij ordered fortification of all army camps and bases in the area.

Security was visibly stepped up Sunday around Kashmir, with police and paramilitary troops stationed outside sensitive areas in Srinagar, including state-run radio and television.

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