WASHINGTON: US intelligence chiefs have warned Congress that India may launch aggressive actionsinside Pakistan on the pretext of stopping `cross-border attacks` and that the ongoing exchange of artillery shells across the Line of Control (LoC) may lead to a direct conflict between the nuclear-armed neighbours.

The warning given at a US Senate Armed Services Committee hearing on Tuesday afternoon followed alarming statements from New Delhi and Islamabad, threatening attacks and counterattacks.

`India has sought and continues tomove to isolate Pakistan diplomatically and is considering punitive options to raise the cost to Islamabad for its alleged support to cross-border terrorism,` Lt Gen Vincent Stewart, the head of US Defence Intelligence Agency, told the committee.

`Increasing numbers of firefights along the Line of Control, including the use of artillery and mortars, might exacerbate the risk of unintended escalation between thesenuclear-armedneighbours,`warned the director for National Intelligence, Daniel R. Coats.

The two of ficials were briefing senators on the US intelligence community`s threat assessment for 2017-18, during which they see terrorist groups attacking American interests across the globe.

On Tuesday, the Pakistan Army denied the Indian Army`s claim that it had carried out an `operation` against Pakistani posts along the LoC. Indian Army`s Maj Gen Ashok Narula claimed the action was aimed to `bring down the number of terrorists in Kashmir so that local youths are not encouraged to take up arms`.

Pakistan says that it never allows terrorists to use its soil for launching attacks into another country. Gen Stewart told the Senate committee that continued threat of `high-level terrorist attacks` in India, violence in India-held Kashmir and bilateral diplomatic recriminations would further strain India-Pakistan ties in 2017.

He said that after a terrorist attack on an army base in held Kashmir last September, New Delhi conducted an operation against militants across the LoC.

`In 2016, Indian and Pakistani forces exchanged some of the heaviest fire in years along the Line of Controlin Kashmir, and each expelled a number of the other`s diplomats amid growing tension,` he added with a warning that yet another terrorist attack could lead to an IndiaPakistan war.Director Coats told the committee that relations between India and Pakistan remained tense following two major attacks last year by militants who he claimed had crossed over from Pakistan.

`They might deteriorate further in 2017, especially in the event of another highprofile terrorist attack in India that New Delhi attributes to originating in or receiving assistance from Pakistan,` he said.

`Islamabad`s failure to curb support to anti-India militants and New Delhi`s growing intolerance of this policy, coupled with a perceived lack of progress in Pakistan`s investigations into the January 2016 Pathankot cross-border attack, set the stage for a deterioration of bilateral relations in 2016.

In a general assessment of the situation in Pakistan, Gen Stewart said that in 2017, Islamabad could slowly shift from traditional counterinsurgency operations along Pakistan`s western border to more counterterrorism and paramilitary operations throughout the country. He noted that such operations have had some success in reducing violence from militant, sectarian, terrorist and separatist groups.

`Anti-Pakistan groups probably will respond to this sustained pressure by focusing their efforts against soft targets,` he added.

Gen Stewart claimed that Pakistan`s nuclear stockpile had continued to grow and this was a cause of concern for the US.

`We are concerned that this growth, as well as an evolving doctrine and inherent security issues associated with Pakistan`s developing tactical nuclear weapons, presents an enduring risk,` he warned.

But he also acknowledged that `Islamabad is taking steps to improve its nuclear security and is aware of the extremist threat to its programme.

In his assessment of the situation in Pakistan, Director Coats said that Pakistan-based terrorist groups `will present a sustained threat to US interests in the region and continue to plan and conduct attacks in India and Afghanistan`.

He warned that `the threat to the United States and the West from Pakistani-based terrorist groups will be persistent but diffuse. Plotting against the US homeland will be conducted on a more opportunistic basis or driven by individual members within these groups`.

Director Coats said that `Pakistan will probably be able to manage its internal security and anti-Pakistan groups will probably focus more on sof t targets`.

He identified Tehreek-i-Taliban Pakistan,Jamaat-ul-Ahrar,AlQaedainthe Indian Subcontinent and Lashkar-iJhangvi as the groups that would pose the greatest threat to Pakistan`s internal security.

The China-Pakistan Economic Corridor would offer militants and terrorists additional targets, he added.