"The infiltration from across the border has actually increased this month and 4,500 militants are waiting for an opportune time to cross over," the Press Trust of India quoted Gupta as saying in the northern city of Chandigarh.

"But our forces are alert and we are committed to thwart the enemy's designs," the minister said, without elaborating on the source of his estimates on the alleged size of the rebel contingent.

Gupta said he was unsure of Islamabad's "sincerity in normalising relations with India."

"For any peace talks to succeed it is important that they (Pakistan) first dismantle the infrastructure they have created to give a boost to terrorist activities."

"They should dismantle the terrorist training camps. The earlier they understand it, the better it will be for the interests of both the countries. Otherwise we will keep our options open," he said.

India accuses Pakistan of funding clandestine training camps and arming militants in its zone of Kashmir. Islamabad denies the charge saying it offers only moral and diplomatic support to what it calls the Kashmiris' struggle for self-rule.

More than 38,000 people have died in separatist violence in Indian Kashmir since the 1989 launch of the Islamic insurgency there.

The accusations came two days after Indian Prime Minister Atal Behari Vajpayee urged Pakistan to end its support to cross-border militancy and boost trade but also offered another olive branch to end hostilities.

"I ask my friends in Pakistan we have fought for 50 years and how much more blood must we shed? We have to combat poverty, unemployment and backwardness," Vajpayee said in an address during India's 56th Independence Day on Friday.

Since April the two countries, which have fought two of their three wars over Kashmir, have restored full diplomatic links and resumed a fractured bus service.

WAR.WIRE