The continuing cross-border infiltration from Pakistan is increasing the potential for hostilities breaking out between India and Pakistan in the wake of a 'triggering event', a top US official told the Senate Select Committee on Intelligence.

"With the Kashmir situation still unresolved and with continued cross-border infiltration from Pakistan, the potential for miscalculation between the two countries remains high, especially in the wake of some violent 'triggering event' such as another spectacular terrorist attack or political assassination," Director of the US Defence Intelligence Agency Vice Admiral Lowell E Jacoby told the panel.

This is inspite of steps taken by both countries to defuse tensions after last year's military standoff along the Line of Control, he said.

"Both sides retain large forces close to the LoC and continue to develop their weapons of mass destruction and missile programmes," Jacoby said in his presentation Tuesday.

He said that India and Pakistan will increase their inventories of nuclear weapons and seek to improve associated
delivery systems.

Jacoby said that Pakistan President Gen Pervez Musharraf claims little influence over militants in Kashmir and other religious extremists, and Pakistan does not completely control areas in the northwest where concentrations of Al Qaeda and Taliban remain.

"While Pakistan is making progress in its return to functioning democracy, President Musharraf faces significant
political and economic challenges and continued opposition," Jacoby said.

Popular hostility to the US is growing and Islamist opponents of the current government could try to instigate a
political crisis through violent means, he said adding, "Coup or assassination could result in an extremist Pakistan."

Citing Pakistan and Iran, Jacoby also expressed concern about increased nuclear proliferation.

China, he said, has provided missile assistance to Pakistan and Iran and 'may be connected to nuclear efforts in
both states'.

While Russia, China and North Korea are the suppliers of primary concern, "I expect an increase in Pakistani and Iranian proliferation," Jacoby said.

"I worry about the prospect of secondary proliferation - today's technology importers becoming tomorrow's exporters," he said.