Hizbul Mujahedeen, a dominant Kashmiri Islamic separatist group, declared a unilateral ceasefire against Indian troops in Kashmir.

The Kashmiri separatist group Lashkar-e-Tayyiba claimed responsibility for a deadly attack on the historic Red Fort in New Delhi, India.

Pakistani President Pervez Musharraf and Indian Prime Minister Vajpayee held a summit in New Delhi to negotiate a truce over Kashmir.

Pakistan became a major ally to the U.S. campaign against terrorism and its war effort to oust the Taliban and al-Qaida terrorists from Afghanistan.

Following a Dec. 13 attack on the Indian parliament, India ordered Pakistan to turn over 20 suspected terrorists believed to be hiding in the Islamic nation.

Pakistani officials arrested at least 50 members of two Pakistan-based Kashmiri separatist groups, Jaish-e-Mohammad and Lashkar-e-Tayyiba -- including the leader of Jaish-e-Mohammad, Maulana Masood Azhar, who India released in Dec. 1999 to satisfy the demands of militants who hijacked an Indian Airlines plane with 155 people aboard.

New Delhi accused Pakistan of aiding the Islamic militant groups, but Islamabad denies any involvement. Both nations deployed more troops to their troubled border, with tensions continuing to rise near the year's end.