A ceasefire took hold on Thursday in Kashmir after the Indian and Pakistani armies agreed to halt deadly cross-border firing that had threatened to unravel a fragile peace process.
As the foreign minister of Pakistan Hina Rabbani Khar appealed for talks with Salman Khurshid to help defuse tensions, senior officers reported that calm had returned to the region after a spike in violence in which five soldiers were killed.
"No fresh incidents of firing or violation of the ceasefire agreement have been reported from the Line of Control," Rajesh Kalia, the spokesman for the Indian army's Northern Command, said.
Pakistan says three of its soldiers have been killed in firing by Indian troops since January 6 along the Line of Control.
India in turn has accused Pakistani troops of killing two of its soldiers on January 8, one of whom was beheaded.
But with Pakistan denying responsibility for the attack and the head still to be returned, officials in New Delhi had struck an increasingly hardline tone towards Islamabad.
The army chief told commanders to respond "aggressively" to any Pakistani firing, the prime minister said there could be no "business as usual" while an opposition leader called for India "get at least 10 heads from the other side".
Speaking on Tuesday while on a trip to New York, Pakistan's foreign minister Hina Rabbani Khar accused India of "warmongering" and its officials of competing against each other to sound more hostile.
But after senior army officers sealed an agreement on Wednesday to "de-escalate" the tensions, Khar said she would like to have talks with her Indian counterpart Salman Khurshid to end the dispute.
"Unfortunately this LoC incident has obviously created questions, but we still believe that dialogue must be the means to resolve this or any issue," Khar said at the Council on foreign relations think-tank.
"We will be open to a discussion, a dialogue, at the level of the foreign ministers to be able to resolve the issue of cross-LoC incidents and to re-commit ourselves to the respect for the ceasefire."
The agreement to end the cross-border firing was reached during a 10-minute phone call on Wednesday between two senior generals, Vinod Bhatia and Pakistan's Ashfaq Nadeem.
"An understanding has been arrived at between the two director-generals of military operations to de-escalate the situation along the Line of Control," army spokesman Jagdeep Dahiya said.
The Pakistani military confirmed the telephone conversation, saying in a statement that "both sides agreed on the need to reduce tension on the LoC".
With the Indian army itching to avenge the beheading, there had been growing signs that a peace process that is only just getting back on track after the 2008 Mumbai attacks could become a victim of the Kashmir flare-up.
On Tuesday India was meant to begin allowing Pakistanis over the age of 65 to obtain a visa on arrival in the western border state of Punjab but the programme has been put on hold indefinitely.
Nine Pakistani players were also withdrawn from a new field hockey league in India and asked to return home.
Some commentators have accused the Prime Minister Manmohan Singh and his government of "caving in" to hardliners.