India accused Pakistan on Tuesday of trying to wipe out its political leadership in last week's suicide attack on Parliament because Islamabad could not accept a powerful and secular neighbor. 
But in a speech to Parliament, Home (Interior) Minister Lal Krishna Advani stopped well short of announcing retaliation against Pakistan, as the Bush administration called for caution as India considers how to respond to the attack on its Parliament building. 
Soon after Indian Prime Minister Atal Behari Vajpayee told party members to prepare for a decisive battle against terrorism, Advani said Pakistan was waging a systemic campaign of "terrorism" against India. 
"This time, the terrorists and their mentors across the border had the temerity to try to wipe out the entire political leadership of India," Advani said, vowing to crush terrorism. 
Pakistan rejected allegations that it sponsored the attack in which the five attackers and nine others died and asked New Delhi to go to the U.N. Security Council to seek an independent inquiry. 
"If India has courage of its convictions, if it believes that its allegations are right, then India should take the matter to the Security Council," Foreign Minister Abdul Sattar told state-run Pakistan Television. India's "prejudiced and biased allegations" are aimed to "defame the freedom struggle in Kashmir as a terrorist movement." 
Advani questioned the timing of the raid amid the U.S.-led worldwide war against terrorism. 
"The only answer...is that Pakistan...itself a theocratic state with an extremely tenuous tradition of democracy -- is unable to reconcile itself with the reality of a secular, democratic, self-confident and steadily progressing India, whose standing in the international community is getting inexorably higher with the passage of time," he said. 
Amid fears of war, junior Foreign Minister Omar Abdullah later told Parliament military force was the last option. 
"Force, violence, war will never be the first option," he said. 
Tensions between the nuclear rivals, who have fought three wars since 1947, have increased as India considers a military strike against Kashmiri separatists sheltering in Pakistan and blames its arch foe for the attack on Parliament. 
The White House is working feverishly to prevent an eruption between two key allies in the war on terrorism, reports CBS News Chief White House Correspondent John Roberts . 
"This is not a reason for India or Pakistan to take action against each other. This is a time for India and Pakistan to take action against the terrorists," said White House press secretary Ari Fleischer, reacting to last week's suicide attack. 
Bush has pledged to eliminate terrorism across the globe and hold terrorist-harboring nations accountable. The administration has condemned the attack in India, but Bush's position is complicated by his alliance with Pakistan in the U.S.-led war in neighboring Afghanistan. 
"India has a legitimate right to self-defense," Fleischer said. "The president believes if that is carried out by India, it needs to be done in a manner that is reflective of the complications in the region and does not add to those complications." 
India accuses Pakistan of sponsoring the separatists. Pakistan denies this, but says it offers moral support. 
Islamabad has threatened to respond if attacked. 
India's main opposition Congress also urged restraint. 
"The remedy should not be worse than the malady," said Shivraj Patil, Congress deputy leader in the lower house. 
"War should be the last option, after all other options are exhausted. We don't need rhetoric but balance. We have not yet exhausted our diplomatic weapons." 
Stocks, bonds and the rupee firmed after Advani's statement, which reduced markets' fears of a stronger and swifter response. 
A spokesman for Vajpayee's fiercely nationalist Bharatiya Janata Party (BJP), which heads the ruling coalition, said the prime minister told party members to prepare their constituencies for a tough battle against terrorism. 
India has already called on Islamabad to close down the Lashkar-e-Taiba and Jaish-e-Mohammed -- two of several Pakistan-based groups fighting Indian rule in the Himalayan region of Kashmir -- which it says are linked to Pakistan's main intelligence agency, Inter-Services Intelligence. 
Police say the parliamentary assailants were all Pakistani. 
They have also arrested four Indians, including a man they say killed a passenger in the 1999 hijacking of an Indian Airlines jet that ended when India freed pro-Pakistan militants. 
After holding back in the face of previous violence, Vajpayee is coming under mounting pressure from hard-liners within the BJP and elsewhere to take military action against the separatists, using airstrikes or ground troops to attack their bases. 
Indian and Pakistani forces exchanged fire again along the Line of Control separating them in Kashmir overnight, Indian officials said Tuesday. The firing is the latest in a series of skirmishes along the de facto frontier created by previous border wars. Both sides are on high alert. 
The United States is urging New Delhi to complete its inquiry before deciding on retaliation. 
Since Sept. 11, President Bush has actively embraced both Pakistan and India. Now Mr. Bush finds himself standing between belligerent neighbors in a region the CIA said is the most likely flash point for a nuclear war. 
"You've got two major nuclear weapons states with a series of crises, misperceptions, politicians in both countries denying the legitimacy of the position of the other," says analyst Stephen Cohen of the Brookings Institution. "I think there is a significant crisis potential here." 
China also called on India and Pakistan to show restraint. 
China and neighboring Pakistan are long-time allies and India has been trying to build better ties with Beijing, with whom it has fought over border disputes. 
Musharraf is due in China Thursday. 
In Pakistan, no one is publicly defending the attack on the Parliament, but commentators are urging restraint from India, citing Pakistani President Pervez Musharraf's pledge to punish those responsible if he is presented with credible evidence. 
"This time India is exploiting the U.S. precedent of attacking first and talking later and has played on the theme of terrorism to earn world sympathy," the Nation, an English-language newspaper said Monday. 
"And yet whoever is behind this misguided abortive attack on the Indian Parliament played right into India's hands. 
"This was just the kind of excuse it was waiting for. That is why all the efforts being made by General Pervez Musharraf to defuse the crisis do not seem to be working."