Indian troops also claimed to have killed 10 Pakistani soldiers in cross-border firing, but this was swiftly denied by a Pakistan military spokesman.

The warning from India's tough-talking army chief General S. Padmanabhan came as Pakistani President Pervez Musharraf was preparing to address the nation on Saturday.

His speech was expected to announce curbs on Muslim militants in a bid to defuse the most serious crisis between the rivals in 30 years.

Padmanabhan warned that if Islamabad dared to unleash its nuclear arms, India was prepared to retaliate with its own arsenal.

"The perpetrator of that particular outrage shall be punished, shall be punished so severely that the continuation of any form of fray will be doubtful," he said.

India has adopted a no-first-strike policy over its nuclear weapons, unlike Pakistan.

But Padmanabhan warned: "We are ready for a second strike. Take it from me that we have enough" arms.

Padmanabhan reiterated the official Indian government line that Pakistan must take tougher action against anti-Indian Islamic militants based on its soil and added New Delhi knew how to strike against their training camps.

India has accused Islamabad of failing to crack down on extremist groups, including two New Delhi blames for the December 13 suicide attack on the Indian parliament which triggered the current crisis.

Pakistani authorities have arrested the leaders and other members of Jaish-e-Mohammad and Lashkar-e-Taiba, but New Delhi says that Islamabad has not gone far enough.

The Indian government has demanded the handover of 20 militants named on a list it provided to Pakistan as well as the closure of training camps and arms supply routes.

China To Sell Pakistan New Jet Fighters New Delhi - Jan 10, 2002 - In an announcement likely to raise hackles in India, Pakistan Thursday said it had received 10 fighter aircraft from China but insisted the deal was unrelated to the current military stand-off between Islamabad and New Delhi. A few hours earlier India's Home Minister L.K. Advani launched a broadside against nuclear rival Pakistan during a visit to Washington, signalling there would be no let-up in the diplomatic or military tensions engulfing South Asia.

Relations between the two neighbours, which have fought three wars since independence in 1947, two of them over Kashmir, have rapidly deteriorated since the attack.

Both sides have massed troops along their common border, and despite handshakes and contacts between the leaders at a regional summit in Nepal last weekend, tensions remain high.

"When two countries mobilize their forces and place them on the border, it is not normal. The situation can comfortably be described as serious," the general told reporters.

"To say that there is scope for a limited conventional war is a truism. Yes, it is there, but it all depends on the circumstances," he said.

Padmanabhan added the deployment of troops to the border in Operation Parakram was now complete.

The tens of thousands of troops will hold large-scale exercises this month, defence officials said.

Meanwhile Indian army spokesman Major R. Lal said at least 10 Pakistani soldiers were killed Friday in cross-border firing in Kashmir.

He said the firing began when Pakistan began shelling Indian posts.

"We retaliated with heavy machine gun fire and mortar shelling," Lal said.

However, a Pakistani military spokesman denied the claim.

"This is totally false," a military spokesman told AFP, adding though that a teenager had been killed and another wounded in separate "unprovoked" fire from Indian troops late Friday.

All eyes are now on Musharraf amid hopes he might be planning some decisive action for tackling militant groups.

A senior Pakistan official, who did not want to be named, said the general who seized power in a coup in October 1999, would make his keenly-anticipated speech on Saturday evening.

Musharraf is under intense international pressure to use the televised address to cool fears of a war with India.

But he faces the hugely difficult task of appeasing international opinion by cracking down on extremists while maintaining the support of his people, who insist he spurn pressure from India.

For domestic political reasons Musharraf cannot afford to be seen as buckling under Indian demands, such as handing over the 20 terrorist suspects to New Delhi.

"What we are hoping to hear in the speech is a strong statement of action against extremism and extremist groups, putting Pakistan on a course that leads to more moderation in politics," said a senior US official on condition of anonymity.

India's Foreign Minister Jaswant Singh said India expected Pakistan to follow its words with action.

"What is expected in the present circumstances is a clear renunciation by Pakistan of abandoning the path of violence, abjuring violence and abandoning cross-border terrorism as an instrument of state policy including in Jammu and Kashmir," Singh told the Aajtak news channel.

"Thereafter, a corresponding, recognisable action in this regard on the ground" is needed, Singh added.

India has also threatened further sanctions if Islamabad failed to deliver a firm commitment to stop promoting what New Delhi terms cross-border terrorism.

India withdrew its high commissioner to Islamabad last month, severed road and rail links between the two and later closed its airspace to flights by Pakistan International Airways.

Meanwhile the five gunmen who carried out the attack on India's parliament were buried Friday after a deadline set by India for Pakistan to claim their bodies expired.

India had given Pakistan until Thursday to collect the bodies of the gunmen whom it said were Pakistani nationals -- a charge Islamabad denies.

All rights reserved. � 2002 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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