AMID the lofty Himalayan peaks of Kashmir, the decades-old confrontation between India and Pakistan is heating up.Troops from both nations skirmish openly and almost daily along the disputed Kashmir border - the line that divides "Pakistan-occupied Kashmir" from the Indian state known as Jammu and Kashmir. And, according to Western diplomats in the region, both countries are conducting a clandestine battle for control of the once-idyllic mountain valley. "Pakistan and India are playing a very dangerous game in Kashmir," says a Western diplomat here. "The situation can only get worse." The widening chaos is reflected in a recent spate of kidnappings of foreign visitors to the state. Two weeks ago, tensions flared after Kashmiri militants fighting against Indian rule kidnapped a group of Israeli nationals traveling in Jammu and Kashmir. In the ensuing gunfight, most escaped, one was captured, and one was killed. The captured Israeli was released several days later. And over the weekend, two Swedish nationals who had been kidnapped earlier this year by militant groups escaped from their captors. Although India maintains the Israelis were tourists, Pakistan questions the claim. Some of the Pakistani press contends that members of the tourist group were Israeli agents. "It's almost incomprehensible that [so many] Israelis would be visiting Kashmir as tourists at this time," a Pakistani foreign official says. This incident and the surrounding accusations reflect decades of distrust between India and Pakistan. Since Britain partitioned the subcontinent in 1947, Kashmir has been the cause of two of the three wars fought by India and Pakistan. India's only Muslim-majority state, Kashmir became part of predominantly Hindu but secular India when the state's Hindu king acceded to India after independence, Indians say. Muslim Pakistan, which controls a sliver of Kashmir, also claims the state and demands that a plebiscite - promised but put off by India - be held. For more than a year, India has been cracking down on what it sees as an externally driven insurgency. In turn, Kashmiris nurse deep grievances against India. But now militant factions are split over whether to push for independence or merge with Pakistan. Violence and atrocities by Indian security forces have become random and widespread, Western and Indian human rights activists say. Kashmiris daily confront searches, arrests, and lengthy curfews. Almost 3,000 people have died in the 18-month insurgency. Pakistan has also exploited the political disarray in India in recent months, Western diplomats say. Pakistan's military Inter-Services Intelligence provides arms and training across the border, Western analysts say, and it sponsors training camps along the Kashmir border. Indian officials admit that organized camps exist within the valley and say about 3,000 militants operate there. The militants have been emboldened enough in recent months to move in large numbers across the Indian-Pakistani border. Indian troops intercepted 300 Kashmiris at the border in April and killed 73 guerrillas in a lengthy battle. In May, tensions among the militants exploded in a gun battle in Srinagar, the Kashmiri capital, following anti-Pakistan demonstrations held by the Jammu and Kashmir Liberation Front (JKLF), the main militant group that favors an independent and secular Kashmir. Increasingly, the JKLF is at odds with Islamic groups backed by Pakistan, Iran, and other Muslim countries. Diplomats say Pakistani intelligence officials are limiting weapons supplies to JKLF in a move to reshape the Kashmiri struggle and give it an Islamic character. Critics warn, however, that Pakistan is meddling dangerously in a dispute that could backfire. Kashmiri demands for independence include areas under Pakistani control, a fact ignored by many officials. "There is a blindness to what could happen in the future in Kashmir," says a Pakistani analyst familiar with the military. "They refuse to see that Kashmir's troubles could spill over into Pakistan."