RAWALPINDI, Pakistan (Reuters) – Pakistan and India must focus on resolving their dispute over Kashmir by capitalising on newly-built trust or risk a new wave of militancy in the divided region, one of Kashmir’s most influential separatist leaders said on Wednesday.

Foreign ministers of the two nuclear-armed rivals sounded unexpectedly positive after talks in New Delhi last month, hailing a “new era” of friendlier and more stable ties and vowing to fight militancy and boost trade and travel.

RAWALPINDI, Pakistan (Reuters) – Pakistan and India must focus on resolving their dispute over Kashmir by capitalising on newly-built trust or risk a new wave of militancy in the divided region, one of Kashmir’s most influential separatist leaders said on Wednesday.

Foreign ministers of the two nuclear-armed rivals sounded unexpectedly positive after talks in New Delhi last month, hailing a “new era” of friendlier and more stable ties and vowing to fight militancy and boost trade and travel.

ISLAMABAD (Reuters) – The United States and Pakistan were working to smooth over curbs on diplomats’ travels in the country on Tuesday, officials from both sides said, as U.S., Pakistani and Afghan officials met to coordinate efforts to end violence in Afghanistan.

The latest spat that involves Pakistan’s recent restrictions on the movements of U.S. diplomats inside the country could strain already prickly ties, vital to Washington’s efforts to defeat al Qaeda and stabilize Afghanistan.

Islamabad (Reuters) – Pakistani President Asif Ali Zardari called Monday for his government and the United States to agree on “clear terms of engagement” in the fight against Islamist militants to avert troubles in their relationship.

Zardari’s remarks, the first such call by the Pakistani president, came at a meeting with U.S. envoy for Afghanistan and Pakistan, Marc Grossman.

ISLAMABAD (Reuters) – Pakistan has imposed travel curbs on U.S. and other diplomats, officials said on Sunday, in the latest sign of worsening ties between the troubled allies since the killing of al Qaeda chief Osama bin Laden.

A Western diplomatic source said the U.S. embassy received a “diplomatic note” from the Pakistani foreign ministry last month, setting travel guidelines for diplomats outside the capital Islamabad.

NOWSHERA/MEHMOOD KOT, Pakistan (Reuters) – A year after deadly floods swept through the Pakistani town of Nowshera resident Imtiaz Ali is seething with anger as he struggles to rebuild his life with almost no help from the government.

Nowshera was one of the hardest hit towns in Pakistan’s mountainous northwest, where flash floods wiped out entire villages leaving behind tangled branches, mud and many thousands of people needing help.

SAHIWAL, Pakistan (Reuters) – Pakistani police struggling to stem a growing Islamist insurgency are recruiting traditional village tax collectors to snoop on militant groups but critics say the plan is ill conceived and unlikely to be of much use.

On a recent day about 100 of the tax collectors, known as numberdars, sat under a big tent in the town of Sahiwal, in Punjab province, listening to lectures from policemen and lawyers about their new duties.

ISLAMABAD (Reuters) – The head of Pakistan’s powerful spy agency headed for Washington on Wednesday for unscheduled talks, the military said, days after the U.S. suspended a third of military aid over deepening tensions in their relationship.

Few details were immediately available about Lieutenant-General Ahmad Shuja Pasha’s one-day trip, but it comes at a time when the Inter-Services Intelligence (ISI) is under intense pressure to sever ties with militant groups including those it has long nurtured as assets in Afghanistan and India.

ISLAMABAD (Reuters) – Pakistan could pull back troops fighting Islamist militants near the Afghan border if the United States cuts off aid, the defense minister said on Tuesday in an interview with Pakistani media.

The United States Monday said it would hold back $800 million — a third of nearly $2 billion in security aid to Pakistan — in a show of displeasure over Pakistan’s removal of U.S. military trainers, limits on visas for U.S. personnel and other bilateral irritants.

ISLAMABAD (Reuters) – A U.S. decision to suspend $800 million in military aid will not affect Pakistani army operations, a Pakistani military spokesman said on Monday. But analysts say the move is likely to fray ties and could harm the country’s economy.

White House Chief of Staff William Daley confirmed on Sunday a New York Times report that the Obama administration had held off a third of $2 billion in security aid in a show of displeasure over Pakistan’s cutback of U.S. military trainers, limits on visa for U.S. personnel and other bilateral irritants.