NEW DELHI, May 26 (AFP) - India and Pakistan have returned to their familiar path of confontation over Kashmir, just three months after peace talks had raised hopes of a new era after half a century of conflict. The rival nuclear powers traded fresh charges after the Indian air force bombed for the first time Pakistan-backed Moslem rebels holed up in the Himalayan hills along the Kashmir border. India warned Pakistan against intervention, raising tensions between the two countries which have fought three wars since their independence in 1947, two of them over Kashmir. The new tensions have virtually destroyed the fragile detente New Delhi and Islamabad forged after Indian Prime Minister Atal Behari Vajpayee took a historic bus ride to the Pakistani city of Lahore in February. The India-Pakistan dialogue has been suspended since the fall of the Hindu nationalist-led government in New Delhi in April. "This is a major setback," admitted Kalim Bahadur, an expert on South Asia at New Delhi's Jawaharlal Nehru University. "Let us hope it does not lead to an escalation and any unintended conflict." Former Indian foreign secretary S.K. Singh was more critical of Pakistan. Singh said that while welcoming Prime Minister Vajpayee three months ago, Pakistan had obviously been planning to smuggle Moslem rebels into the Indian state of Kashmir. "What is important is we thought the Lahore meeting will give Pakistan the message that we can be good friends but they have to stop this. "They haven't, however, stopped all this," he told AFP. India and Pakistan dispute the ownership of Kashmir. New Delhi holds the southern two-third of the picturesque Moslem-majority state while the rest is controlled by Islamabad. A Pakistan military spokesman said the country's forces had been put on high alert and the situation was being carefully monitored after a few bombs landed on their side in Kashmir but caused no damage. "This makes the matter very, very serious," the spokesman said. "Pakistan reserves the right to retaliate in whatever manner considered appropriate," he said, adding responsibility for any escalation would "squarely rest on India and its armed forces." New Delhi accuses Islamabad of arming and training Moslem militants fighting to secede Kashmir from India. The armed campaign raging over the past decade has claimed more than 24,000 lives. Pakistan says its support is confined to diplomacy. India alleges the heavily-armed rebels who have infiltrated into Kashmir from Pakistan were Moslem mercenaries, including Taliban, and Pakistani troops. The area has seen heavy fighting between Indian troops and the mercenaries over the past two weeks, leaving dozens dead on both sides. Indian and Pakistani troops along their border have been locked in artillery duels. Singh also criticised the United States for calling for restraint in dealing with the "infiltrators," who India says have sneaked into Kashmir under the cover of Pakistani artillery fire. US ambassador Richard F. Celeste met Indian Defence Minister George Fernandes here Wednesday and voiced concern over the border clashes. "People have come six kilometers into our territory, and we are justly trying to get them out," Singh said. "Because of the terrain, we have had to use air power. "The ambassador says 'please use restraint.' Let America be restrained in Yugoslovia." The border clashes have also caused panic in Kashmir. "Any false step by either side will lead to a large conflict," warned professor Bahadur. "The situation is very critical. Let us hope better senses prevail on both sides. "The good spirit generated on both sides of the border by Vajpayee's bus ride to Lahore has to be kept alive." Kashmir is at the heart of perenially tense India-Pakistan relations. Troops of both countries regularly clash along the Kashmir border. Kargil -- the scene of latest fighting -- has seen several clashes in recent years.  