‘We stopped a nuclear conflict’

• India, Pakistan military ops chiefs' hold talks by phone
• Modi vows "strong response' to future 'terrorist attacks'
• New Delhi opens all airports
• Pakistan share index jumps 9%, Indian equity markets close up 4%
• India's opposition Congress seeks special parliament session

President Donald Trump yesterday said that US intervention prevented a "bad nuclear war" between India and Pakistan, after the South Asian rivals agreed to a ceasefire following a series of clashes.

"We stopped a nuclear conflict. I think it could have been a bad nuclear war, millions of people could have been killed. So I'm very proud of that," Trump, who announced the ceasefire on Saturday, told reporters at the White House.

There were no reports of explosions or projectiles fired overnight, with the Indian army saying Sunday was the first peaceful night along their border in recent days.

The ceasefire followed four days of intense exchanges of fire as the nuclear-armed arch rivals targeted each other's military installations with missiles and drones, killing dozens of civilians.

Meanwhile, Indian Prime Minister Narendra Modi yesterday warned Pakistan that New Delhi would target "terrorist hideouts" across the border again if there were new attacks on India and would not be deterred by what he called Islamabad's "nuclear blackmail".

Modi was speaking two days after the ceasefire.

"If there is a terrorist attack on India, a fitting reply will be given... on our terms," Modi said, speaking in Hindi in a televised address. "In the coming days, we will measure every step of Pakistan... what kind of attitude Pakistan will adopt."

"India will strike precisely and decisively at the terrorist hideouts developing under the cover of nuclear blackmail," he said, and listed New Delhi's conditions for holding talks with Islamabad and lifting curbs imposed after the Kashmir attack.

"India's position is clear: terror and talks cannot go together; terror and trade cannot go together. And water and blood cannot flow together," he said, referring to a water sharing pact between the two countries New Delhi suspended.

There was no immediate response to his comments from Islamabad.

Modi's address came hours after the military operations chiefs of India and Pakistan spoke by phone.

"Issues related to continuing the commitment that both sides must not fire a single shot or initiate any aggressive and inimical action against each other were discussed," the Indian army said.

"It was also agreed that both sides consider immediate measures to ensure troop reduction from the borders and forward areas," it added.

There was no immediate Pakistani readout of the military operations chiefs' talks.

In Washington, Trump said the leaders of India and Pakistan were "unwavering", and the US "helped a lot" to secure the ceasefire, adding that trade was a "big reason" why the countries stopped fighting.

"We are going to do a lot of trade with Pakistan... and India. We are negotiating with India right now. We are soon going to negotiate with Pakistan," he said, just ahead of Modi's speech.

The military confrontation began on Wednesday, when India said it launched strikes on nine "terrorist infrastructure" sites in Pakistan and Pakistan-administered Kashmir following an attack by militants in Indian-administered Kashmir last month that killed 26 men. New Delhi blamed the attack on Pakistan.

Islamabad denied any links to the attack and called for a neutral investigation. It said the targets hit on Wednesday were civilian sites.

India and Pakistan both rule parts of the Himalayan region of Kashmir, but claim it in full.

Yesterday, India reopened 32 airports it had shut during the clashes, with the Airports Authority of India saying in a statement they were available for civil operations. Some schools remained closed.

Pakistan had reopened its airspace on Saturday.

Pakistan's international bonds rallied sharply, adding as much as 5.7 cents in the dollar, Tradeweb data showed.

Late on Friday, the International Monetary Fund approved a fresh $1.4-billion loan and also the first review of its $7-billion programme.

Pakistan's benchmark share index .KSE closed up 9.4 percent on Monday, while India's blue-chip Nifty 50 .NSEI index closed 3.8% higher in its best session since February 2021.

While Islamabad has thanked Washington for facilitating the ceasefire and welcomed Trump's offer to mediate in the Kashmir issue, New Delhi has not commented on US involvement in the truce or talks at a neutral site.

India, which says disputes with Pakistan have to be resolved directly by the neighbours, has in the past rejected the involvement of any third party.

"Kashmir is a bilateral issue, not an international issue," Shilpak Ambule, India's ambassador in Singapore, told Bloomberg TV. "For us, the word mediation does not work with the Kashmir issue."

In Beijing the foreign ministry said China, which also controls a small slice of Kashmir, was willing to maintain communication with both its neighbours, and play a "constructive role in achieving a comprehensive and lasting ceasefire" and maintaining peace.

India blames Pakistan for an insurgency in its part of Kashmir that began in 1989, but Pakistan says it provides only moral, political and diplomatic support to Kashmiri separatists.

Some in the region remained concerned despite the ceasefire.

"It is still scary," said Padam, a traveller in a train from Jammu to New Delhi.

"After blasts all over the city (Jammu), I am scared. I am going to stay in Delhi till I am sure the agreement is binding on Pakistan," added Padam, who declined to give his second name.