New Delhi's caution is based on the belief that the scene of action has now shifted from Washington to Islamabad and it is now to be seen how Prime Minister Nawaz Sharif would invoke his authority to order the Pakistan army back to the barracks.

Government sources here reiterated that our armed forces would continue their operations even as Sharif took time to arrive at a decision. ``We must first see evidence on the ground that Islamabad intends to withdraw. They must, for example, stop the supply lines that are keeping their troops going, they must match their words with action,'' the sources said.

Foreign Minister Jaswant Singh also said that the united states has indicated to India that the ``concrete steps'' agreed to be undertaken by Islamabad on defusing the Kargilsituation will start with withdrawal of Pakistani troops from the Indian side of the LoC.

The official spokesman, meanwhile, with an eye on the phrase in the Clinton-Sharif joint statement which talks of the US taking a ``personal interest'' in encouraging a return to the bilateral dialogue process, again rejected the notion of third-party involvement.

``The Lahore process,'' the spokesman said, ``is direct and bilateral. In this process, there is no place whatsoever for any third-party involvement.''

But the sources also agreed that once the conflict was over, there would be increased pressure on New Delhi to speed up talks with Pakistan over Kashmir. ``That was what the Lahore process was all about, a code name for talks on Kashmir. We had already agreed to that,'' they said.

New Delhi was today delighted with the order of the steps mentioned in the statement, which clearly gave precedence to the Simla agreement over the Lahore declaration.

But that wasn't all. Soon after the three-hour-longconversation between Clinton and Sharif ended in Washington, US National Security Council advisor Sandy Berger called his counterpart, Principal Secretary Brajesh Mishra here. This morning, US deputy secretary of state Strobe Talbott talked to External Affairs Minister Jaswant Singh for nearly 40 minutes.

The senior leadership's message was the same as the one given by Clinton earlier: The US had told Pakistan to return to its own side of the LoC. In turn, Sharif has promised he would take ``concrete steps'' to do so, which the US side said it understood to mean a complete withdrawal.

In Delhi, Government sources said they believed Pakistan had little option now but to withdraw, if only because the US had publicly given its word it would. They pointed out that the ``next few days'' would be crucial as Sharif balanced his options on the scale.

One view in Delhi is that Sharif will order a withdrawal from across the LoC, but in exchange the Kashmir Valley could explode again. Sources felt Sharif wouldhave to ``give something'' to hardline elements opposed to a withdrawal and that the quid pro quo could be to revive infiltration in the Valley.

But with the Army continuing to recapture key heights along the LoC and inflicting severe casualties on the enemy, the mood in the Government seems to be getting tougher. The sense here is that if Islamabad honoured its commitment to the US, it would be a welcome decision, since that would have the effect of ending the conflict and saving Indian lives.

But if Sharif were to order a withdrawal only when the Army had nearly beaten the Pakistanis back to the LoC, sources said, then the Government's reaction would have to be a qualitatively different one.