The Pakistani intruders did not just kill five Indian soldiers along the Line of Control. They have also effectively derailed the dialogue process that India and Pakistan were scheduled to resume later this month.
The resumption of talks between the two neighbours was the first concrete step towards normalisation, after relations between the two were put in the deep freeze after a similar incident on the LoC in January this year when two soldiers were killed, of which one was decapitated.
The thaw between the two had begun soon after Nawaz Sharif won a convincing electoral victory. He had extended a hand of friendship even before he was sworn-in as the Prime Minister and Manmohan Singh had reciprocated and personally sent his special envoy to Pakistan, to call on Sharif.
After weeks of silent work by special envoys SK Lamba and Shahriyar Khan, India and Pakistan had finally agreed to secretary-level talks of the various working groups including water, Siachen and Kashmir.
But the killing of five soldiers has come as a setback for that process with the Opposition upping the ante and BJP leader Yashwant Sinha going to the extent of asking the Congress to explain on whose side it was - India's or Pakistan's.
In January, after the national outrage that followed the jawan's beheading, Manmohan Singh - perhaps in response to Sushma Swaraj asking for ten Pakistani heads - had said that it could not be business as usual with Pakistan.
And just when temperatures had cooled down, comes not only the killing of five soldiers but also an attack on the Indian consulate in Jalalabad in Afghansitan.
The two need to be read in unison.
The Pakistani establishment is working on two fronts. In Afghanistan, its aim is to restrict India's influence and now clearly, the fall-out of the LoC killings will similarly restrict Nawaz Sharif's room for maneuverability vis a vis India.
Sharif and Singh are scheduled to meet on the sidelines of the United Nations General Assembly in New York in end-September. The meeting might still take place but it will be reduced to a cosmetic exercise, perhaps no more than a photo opportunity between the two.
India, after considerable prodding from the US, has kept the dialogue going with Pakistan despite repeated provocations.
Atal Behari Vajpayee invited President Parvez Musharraf to Agra despite him being the architect behind the Kargil intrusion and similarly, Singh encouraged talks after the Mumbai attacks.
The dialogue process stands threatened once again and attacks on Indian assets in Afghanistan are set to increase with the impending withdrawal of US troops in 2014.
Testing times lie ahead, not only for Manmohan Singh and Sharif, but the future of India-Pakistan relationship as a whole.