India’s prime minister said on Friday that last month’s bombing of its embassy in Kabul had cast a shadow over a peace process with Pakistan, and he had expressed his disappointment and concern to Islamabad.

Addressing a huge gathering from the ramparts of New Delhi’s historic Red Fort to mark independence day, Manmohan Singh said Pakistan must clamp down on terrorism.

India has blamed Pakistan’s spy agency for the July 7 attack in which two Indian diplomats were among 58 people killed. Pakistan has denied any involvement.

’If this issue of terrorism is not addressed, all the good intentions that we have for our two peoples to live in peace and harmony will be negated,’ Singh said.

’We will not be able to pursue the peace initiatives we want to take.’

He said the Kabul blast had cast a shadow over efforts to normalise relations with Pakistan and to bring lasting peace to the region.

’I have personally conveyed my concern and disappointment to the government of Pakistan,’ Singh said, marking the 61st anniversary of independence from British rule.

He also called for peace in troubled Indian Kashmir, where separatists are protesting in the streets and Hindus have clashed with Muslims over a stalled land deal for a Hindu temple. India’s portion of Kashmir is the country’s only Muslim-majority state.

At least 27 people have been killed since June in some of the biggest protests since a revolt against Indian rule broke out in Kashmir in 1989.

The trouble began when the government promised to give forest land to a trust that runs Amarnath, a cave shrine visited by Hindu pilgrims. After huge protests by Muslims, it backtracked, in turn angering Hindus in the Jammu region of the state.

’In this hour of crisis, divisive politics will lead us nowhere,’ Singh said.

’I appeal to all political parties to keep the long-term interests of Jammu and Kashmir in view and come together to find a permanent solution.’

Inflation

The prime minister also said India’s soaring inflation was due to external factors but authorities were taking steps to insulate the poor against it. ’But in taking these steps we need to keep in mind that we do not do anything which hurts the growth rate,’ Singh said.

Annual inflation is running at 12.4 percent, its highest since the current index became available in 1995.

Singh also said that access to atomic energy was vital in solving India’s energy problems. ’The nuclear agreement that we are negotiating with developed countries will end India’s nuclear isolation.’

Security clampdown

India rolled out a security clampdown on Friday following recent bomb attacks in some of its cities and turmoil in Kashmir.

Snipers kept a close watch from high-rise buildings as Singh unfurled the national flag at the Red Fort to a 21-gun salute before addressing the nation.

Security forces are on their highest alert across the country to prevent attacks from separatist militants or Maoist rebels.

Maoists operate in large areas of south and east India and Singh has said in the past the militants are the biggest security threat to the country.

In the capital, barricades have been put up on roads and police were frisking people in malls and checking bags.

In Kashmir, the disputed region’s main separatist alliance has called a general strike for Friday and streets were deserted.

’We appeal to people to observe August 15 as a black day and stay away from Indian functions,’ the All Parties Hurriyat (Freedom) Conference said in a statement.

On Thursday, the government sweetened the celebrations for five million of its workers, agreeing to hefty pay rises.-Reuters