'Tensions between the government and its Baloch opposition have grown because of Islamabad's heavy-handed armed response to Baloch militancy and its refusal to negotiate demands for political and economic autonomy. The killing of Baloch leader Nawab Akbar Khan Bugti in August 2006 sparked riots and will likely lead to more confrontation,' the report said.

'The conflict could escalate if the government insists on seeking a military solution to what is a political problem and the international community, especially the US, fails to recognise the price that is involved for security in neighbouring Afghanistan,' where NATO forces are trying to quell a resurgent Taliban, the report warned.

'Tensions with the central government are not new to Balochistan, given the uneven distribution of power, which favors the federation at the cost of the federal units. The Baloch have long demanded a restructured relationship that would transfer powers from what is seen as an exploitative central government to the provinces,' it said.

'But Musharraf's authoritarian rule has deprived them of participatory, representative avenues to articulate demands and to voice grievances. Politically and economically marginalised, many Baloch see the insurgency as a defensive response to the perceived colonisation of their province by the Punjabi-dominated military,' said the report released Wednesday, when Pakistan's President Pervez Musharraf was in Brussels to meet European Union leaders before leaving for Havana to attend the summit of the Non-Aligned Movement.

'Although regional parties still seek provincial autonomy within a federal parliamentary democratic framework, and there is, as yet, little support for secession, militant sentiments could grow if Islamabad does not reverse ill-advised policies,' the ICG said.

'The conflict could be resolved easily,' it argued. 'Free and fair elections in 2007 would restore participatory representative institutions, reducing tensions between the centre and the province, empowering moderate forces and marginalising extremists in Balochistan. The military government should recognise that it faces conflict not with a handful of sardars [tribal leaders] but with a broad-based movement for political, economic and social empowerment. The only way out is to end all military action, release political prisoners and respect constitutionally guaranteed political freedoms.'

More reports from Pakistan | Afghanistan