Jammu: India accused Pakistan on July 14 of being behind what it described as a "horrible" attack by Islamic militants disguised as Hindu holy men on a mainly Hindu shantytown in Southern Kashmir, in which 27 people died.

"It is evident that this is inspired by Pakistan," Foreign Minister Yashwant Sinha told 'Aaj Tak' television news.

"This is a tragic incident and this is happening and poor people were targeted," he said of the attack late on July 13 on Qasim Nagar shantytown on the outskirts of Jammu.

A massacre in Southern Kashmir on May 14 by Islamic militants, New Delhi claims were sponsored by Islamabad, brought the nuclear-ready rivals to the brink of war, averted only after a massive diplomatic effort by a jittery international community.

The New Delhi government condemned the July 13 attack and said it would fully assess the situation after a tour of the area later in the day of Deputy Prime Minister Lal Krishna Advani, who was also to meet wounded victims of the shooting in hospital in Jammu.

"Yesterday again in Jammu there was a horrible incident in which up to 27 people were killed; this included 13 women and one child," Advani told reporters at the end of a two-hour meeting on July 14 of the Cabinet Committee on Security in New Delhi.

"All of them were labourers. Investigations are going on into the incident."

Pakistan, commenting before Sinha made his accusations, condemned the shantytown killings as a "terrorist" act aimed at escalating tensions in the region.

"The government of Pakistan condemns the killing of a number of civilians and injuries to many others in a terrorist attack in the outskirts of Jammu on June13," a foreign office statement said.

"The motivation behind the attack seems to be to enhance tension in the region."

Among the dead in July 13 attack were 13 women and a three-year-old child, a police spokesman said.

At least 35 other people were wounded, with nine still in critical condition, said doctors at the government Medical College in Jammu.

Police and witnesses said between three and five militants on July 13 evening attacked Qasim Nagar shantytown, which houses predominantly Hindu labourers from the Eastern states of Bihar and Orissa.

According to Jammu deputy inspector of police, Dilbagh Singh, the attackers, carrying bags and dressed in the saffron robes of "sadhus", lobbed grenades into the crowd before opening fire with Kalashnikov assault rifles.

Witnesses said the attackers invaded two small temples where they continued firing before making off into the nearby Bathindi forests.

A manhunt continued through the night, with residents reporting the sound of exploding grenades and the crackle of automatic gunfire in the forests. The hunt intensified during the day but the fact that the gunmen had not been located left residents of the shantytown jumpy, with many leaving in case the gunmen returned.

Kashmir's Chief Minister Farooq Abdullah blamed Pakistan-sponsored militant groups for the attack.

"So long as the great powers, the United States and the rest, do not understand that the basis of terrorism lies in Pakistan, this kind of violence will continue," he told reporters shortly after his arrival from London, where he had been on a private visit.

Police blamed the attack on the Pakistan-based group Lashkar-e-Toiba, which is accused by India of attacking its national Parliament on December 13 in which 14 people were killed.

That attack escalated tension between the India and Pakistan, with the two long- standing rivals together sending almost a million soldiers between them to their common frontiers.

Tensions were further ratcheted up on May 14 when militants New Delhi claims are supported and sponsored by Islamabad massacred soldiers and their families near Jammu.

With fears of all-out war in South Asia, the international community launched a diplomatic bid to ease pressures, pulling the rivals back from the brink after Pakistan assured it would rein in Islamic rebels attacking from its territory on targets in Kashmir.

In the past week or so, however, India has claimed the infiltrations have begun to increase again and accused Pakistani President Pervez Musharraf of reneging on his promise.