"Terrorists have begun to use military tactics...At present, terrorists are using sophisticated small weapons and explosive devices to perpetrate terror. In future, they are likely to use nuclear, biological and chemical devices and other mechanical and psychological devices," Home Minister Shivraj Patil said while inaugurating a two-day conference of police DGs and IGs organised by the Intelligence Bureau.

The Home Minister said for creating a fear psychosis, terrorists choose targets which can lead to disturbance of bigger and more complicated nature.

"That is why they appear to be attacking the places of religious nature, so that conflicts between the people belonging to different religions or communities can be created," he said.

In an apparent reference to terror strikes at places of worship, he said terrorists wanted to use the psychology of unsuspecting and innocent persons to flare up communal disturbances.

Expressing concern over inter-state ramification over terrorism, he strongly favoured a central agency by amending laws but said that it was not possible till all the states cooperated. "Let us hope that it would become available sooner than later."

Ruling out a POTA-like law, he said the relevant provisions of the repealed act had been introduced in the unlawful activities act.

"We have laws, which have provisions to deal with terrorism. They should be used properly," Patil said, virtually rejecting BJP's demands for a tough anti-terror law like POTA and a suggestion by the second Administrative Reforms Commission to have a new and comprehensive law to tackle terror.

The Home Minister said when POTA was repealed, some relevant chapters in it were transferred into the Unlawful Activities Prevention Law, "lock, stock and barrel".

The chapters have provisions useful to control terrorist activities, free flow of funds to the terrorist groups and relating to the admissibility of certain kinds of evidence collected with the help of electronic equipment, the Home Minister said.

He said there were provisions in POTA which went against the basic principles of criminal jurisprudence relating to the onus of proof and admissibility of the confessions, not made according to the principles adopted in the Criminal Procedure Code.

"It is not possible to have a law like POTA on the statute book. The relevant provisions in POTA, needed to control terrorism, have been introduced and retained in the Unlawful Activities Prevention Act," he said.

Anguished over the tardy utilisation of central funds by state governments for police modernisation, Patil said if funds remain unutilised, the purpose of strengthening the forces cannot be fulfilled.

Noting that the police-population ratio in the country was "not very comfortable", he said there were many vacancies in the police which have remained unfilled for many years. "If the number of vacancies is around one lakh, we need to take immediate actions to fill them," the Union Home Minister said.

Advocating cooperation between the states and their forces to control terrorism, Patil said each State can have a nodal officer, who can deal with his counterparts in other states.

Asking the states to strengthen the intelligence gathering mechanism, the Home Minister said the best weapon, which can be used to counter terrorism, is intelligence.

"No other device or weapon can be as useful as intelligence can be. Unfortunately, the machinery, which is with the States, is not strong enough to collect the intelligence," he said and advocated that it was necessary to strengthen them without delays.

The states and the Union help one another, in sharing the intelligence. "What is given by the Union to the States is not always of operational nature. Some times, misunderstanding develops when such matters are discussed publicly," he said.

To control the terrorism in the hinterland, Patil said "we have to see that infiltration of terrorists from other countries do not take place through sea routes and through the borders between India and friendly countries. The coast lines also have to be guarded through Navy, coast guard, coastal police."

Welcoming the Home Minister, Intelligence Bureau Director P C Haldar said the country was facing a new type of terrorism from religious fundamentalist organisations. He said the annual conference would review terrorism situation in the country threadbare and discuss measures to counter the fresh challenges.

The function was attended by three Ministers of State for Home -- Sriprakash Jaiswal, Shakeel Ahmed, Radhika Selvi, National Security Advisor M K Narayanan, Cabinet Secretary K M Chandrasekhar and Home Secretary Madhukar Gupta.