India's prime minister held talks with senior Cabinet ministers and military officials in disputed Kashmir on Thursday, as shelling between nuclear-armed India and Pakistan pounded villages on both sides of their border.

At least one Indian soldier was killed and seven civilians injured in overnight firing, police said.

In Srinagar, the summer capital of Jammu-Kashmir state, Prime Minister Atal Bihari Vajpayee held talks with Defense Minister George Fernandes, Interior Minister Lal Krishna Advani, top military officers, intelligence chiefs and senior civilian leaders.

Amid fears of a fourth war between India and Pakistan, it was the first time that an Indian prime minister headed a meeting of the Unified Command which includes the chiefs of India's army, navy and air force. In the past, the state's chief minister has chaired emergency military talks.

On Wednesday, standing about 15 miles from the disputed frontier, Vajpayee addressed hundreds of soldiers on the tense Kashmir border and told them to prepare for war. Army officers responded by declaring the troops were ready to die and India's navy moved five warships nearer to Pakistan.

Cross-border shelling has killed dozens in the past week in divided Kashmir, which both nations claim in its entirety. India and Pakistan have fought two of their three wars over the Himalayan region.

In Washington, the U.S. State Department appealed for an end to shelling in Kashmir and asked Pakistan to curb the influx of Islamic militants into the contested territory.

Secretary of State Colin Powell telephoned British Foreign Secretary Jack Straw to coordinate policy.

In London, Straw warned that the two countries lack the highly developed control systems which helped prevent nuclear conflict in Europe for 40 years during the Cold War.

``In contradistinction to the situation finally achieved in Europe between NATO and the Soviet bloc, there isn't a highly developed nuclear doctrine and well-developed back channels of communication between these two parties, then there is a risk of nuclear warfare,'' he told BBC radio on Thursday.

``It is another reason why we have to do everything we can to avert a crisis.''

Powell is sending his deputy, Richard Armitage, to the region shortly to confer with Indian and Pakistani leaders and Straw is due here next week.

At the Pentagon, Defense Secretary Donald H. Rumsfeld said Wednesday he was attempting to reach Indian Defense Minister George Fernandes by telephone to discuss the situation.

``The message clearly to everyone is that it is a dangerous situation,'' he told reporters.

Rumsfeld said the confrontation is harmful to the U.S.-led war in Afghanistan because Pakistan has pulled some of its forces from the Afghan border, where they work in coordination with the United States to hunt down al-Qaida fighters.

In Islamabad, Pakistan's top military leaders and Cabinet issued a statement endorsing efforts to resolve the dispute through negotiations, but warned that Pakistan was ready ``to meet any contingency resolutely and with full force.''

India says it is being forced to fight a proxy war with Pakistan, which it accuses of training and arming Islamic militants who have been fighting for Kashmir's independence or merger with Muslim Pakistan for 12 years. The militants have staged deadly attacks inside mostly Hindu India.

Islamabad says it has no control over the militants and provides them only moral, not material, support. In September, Pakistan joined the U.S.-led war on terrorism.

The cross-border firing resumed Wednesday night and continued into the morning Thursday in the Hira Nagar sector of Indian-controlled Pakistan, a police officer said on condition of anonymity. Some civilians suffered minor injuries.

The two sides also fired mortar and artillery guns in the Punch and Naushera sectors across the 1972 cease-fire line dividing Kashmir between India and Pakistan, said Lt. Col. H.S. Oberoi, an army spokesman.

At least 65 homes were destroyed in the villages of Manyari, Pansar and Chadwal after being hit by tracer fire, the police officer said. The area is 50 miles southwest of Jammu, the winter capital of Jammu-Kashmir state.

Indian and Pakistani troops have been firing at each other's positions since last Friday following an attack on an army camp on the outskirts of Jammu by suspected Islamic militants that killed 34 people — mostly soldiers' wives and children.