Despite the worst bout of violence in years along the disputed Kashmir border, Pakistani and Indian officials have kept tension from spiraling out of control. It’s an example of just how far the archenemies have come since relations were shattered by the 2008 Mumbai terror attack.

Risk of escalation remains, but senior officials from both nations have sought to limit the potential damage to relations between the nuclear-armed neighbors, which have slowly warmed since Pakistani militants killed 166 people in the Indian coastal city of Mumbai.

“The violence may have a negative impact and slow down the reconciliation process, but it will not end the process because, despite the incidents, the two governments at the official level are not in favor of escalation,” said Pakistani political analyst Hasan Askari Rizvi.

Private Indian media has hyped the Kashmir violence, which killed two soldiers on each side, but the response in Pakistan has been more muted, even among Islamic hard-liners who are opposed to better relations with India and have suspected ties to the Pakistani military, Rizvi said.

“That indicates the army generally wants to improve relations with India,” he said. “These groups make noise, but the noise stays within limits.”

India and Pakistan have been rivals for decades. The two have fought three wars since they were carved out of British India in 1947 — two of them over the Himalayan region of Kashmir. The region is divided between the two countries, but each claims it in its entirety.

They suspended peace talks after the Mumbai attack, but both countries have reasons for wanting better ties.

Pakistan desperately wants increased trade with India to help turn around its stuttering economy. The country’s powerful generals cannot afford conflict with India at a time when the army is bogged down in a battle against Pakistan Taliban militants — a fight that could get even more complicated with the drawdown of foreign forces in Afghanistan.

India‘s once-roaring economy has also stumbled in recent months, and the government has sought to improve growth, including loosening decades-old restrictions on trade with Pakistan. India also knows from past experience how much damage conflict with Pakistan can cause to its economy.

The arc of relations between Pakistan and India could also influence the fate of neighboring Afghanistan, where nearly all international troops are scheduled to withdraw by the end of next year.

Pakistan is sandwiched between India to the east and Afghanistan to the west. Islamabad has long worried about Indian influence in Afghanistan, which many analysts believe has driven Pakistan‘s support for the Afghan Taliban. That fear has been compounded by the billions of dollars that India has invested in rebuilding Afghanistan in recent years. Better relations between the historical foes could help ease Pakistan‘s concerns.

But the clashes along the mountainous Kashmir border over the last week highlight how easily simmering tension can flare into conflict. The biggest risk remains an attack by militants like the one in Mumbai that would likely torpedo the reconciliation process once again.

G. Parthasarthy, a former Indian high commissioner to Pakistan, said he doesn’t believe the situation will escalate, but cautioned that the environment remains precarious, especially since India is worried about increased infiltration by Pakistani militants in Kashmir.

“It depends on how things play out,” said Parthasarthy. “If infiltration continues, if our forces on the border remain edgy, who knows?”

Pakistan and India struck a cease-fire agreement over Kashmir in November 2003. There have been periodic violations of the cease-fire, but the incidents during the past week have been the most serious.

The tit-for-tat fighting began on Jan. 6 when Pakistan accused Indian troops of raiding an army post and killing one of its soldiers.

India denied raiding the post. It said its troops fired across the border in response to Pakistani shelling that destroyed a home on the Indian side.

On Jan. 8, India claimed Pakistani soldiers, taking advantage of heavy fog, crossed the border and killed two Indian soldiers and beheaded one of them. The reported decapitation raised suspicions among some that militants might have been involved.

Pakistan denied the allegations and suggested U.N. monitors in the region conduct an inquiry — a call that India rejected, saying it didn’t want to internationalize the issue.

Then on Jan. 10, Pakistan said Indian troops fired across the border and killed another one of its soldiers. The Pakistani army said the shooting was unprovoked, while the Indian military said its troops were responding to fire from across the frontier.

Both countries condemned the violence and summoned senior diplomats to stage official protests. But senior officials stressed the clashes should not derail reconciliation. The countries took recent steps to ease cross-border travel and are working on increasing trade.

Pakistani Foreign Minister Hina Rabbani Khar said Thursday that she wants to continue down the track of “trust building” and “normalizing the region.”

Her Indian counterpart, Salman Khurshid, called the decapitation of the Indian soldier “extremely shocking” on Thursday, but also said he believes “whoever has tried to derail a wholesome peace process shouldn’t succeed.”

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Hussain reported from Srinagar, India. Associated Press writers Muneeza Naqvi and Tim Sullivan in New Delhi and Lori Hinnant in Paris contributed to this report.

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