By Mike Wooldridge BBC correspondent, Islamabad

India says its patience is running out because Pakistan has failed to stop militants crossing the border to carry out acts of terrorism.

This could turn out to have been the most critical speech of General Musharraf's leadership, depending on how events unfold in the coming days and weeks

General Musharraf insisted in his speech that there is no such infiltration from Pakistan.

He said the "aggressive naming and blaming from Indian leaders" was perpetuating war hysteria.

In the key passage of his address he repeated the pledge he gave in a landmark speech in January - a month after the attack on the Indian Parliament - that Pakistani soil would not be used for any terrorist activity.

But he did not announce any new measures in the crackdown on Islamic extremist groups.

If that failed to impress India, General Musharraf then went on to issue strong condemnation of Indian "atrocities" in Kashmir.

Going even further, he also claimed that atrocities were being committed by "Hindu extremists" in Gujarat and elsewhere in India against Muslims and other minorities.

National cause

The conventional view is that it would probably be political suicide for any Pakistani leader not to publicly support the Kashmir cause. It has been a centrepiece - if not the centrepiece - of Pakistani policy for half a century.

General Musharraf chose not to abandon the convention. Kashmir, he said, lives in the heart of every Pakistani.

This could turn out to have been the most critical speech of General Musharraf's leadership, depending on how events unfold in the coming days and weeks.

People are already fleeing border areas

It is hard to resist the conclusion that the address was as much for domestic consumption as it was for India and for an anxious world.

General Musharraf faced criticism within Pakistan for doing a U-turn on Afghanistan and co-operating with the Americans.

He has had to ride out a storm of controversy over the referendum he called to secure a mandate to stay as President for the next five years.

This is not a time when he would want to be accused of weakness.

General Musharraf's rhetoric of defiance with India and his insistence that Delhi take steps to reduce the tension, is clearly a high-risk strategy.

Problems for peace

It does not rule out the possibility of further steps behind the scenes to tackle extremism.

But for now it does not make things easier for those trying to broker peace between Pakistan and India.

Unless, that is, the passions that are now being invested in preparations for war are diverted into politics instead.

It was almost in passing that General Musharraf announced the elections that will bring Pakistan's parliament back into being will start on 7 October.