(Bloomberg) -- India and Pakistan’s military are in open conflict on Twitter, trading accusations and threats over the disputed state of Kashmir.

For now, the conflict is staying online. But the possibility of it spilling across the defacto border that divides the Indian- and Pakistan-controlled parts of Jammu and Kashmir, or erupting on the streets of the summer capital, Srinagar, remains a dangerous prospect.

The rival nations have been at loggerheads for the past week after India scrapped a measure that granted autonomy to the restive Kashmir region. Islamabad has downgraded diplomatic ties and cut trade relations.

"Lately Pakistan has been openly threatening about certain incidents in #Kashmir," India’s Chinar Corps, stationed in Srinagar, tweeted Friday. "Notwithstanding we’ll take care of all of them; let anyone come & try & disrupt the peace in valley, we will have him eliminated!"

Pakistan responded. "Usual blatant lies," tweeted Pakistan Armed Forces spokesman Major General Asif Ghafoor. "Should there be an attempt by Indian Army to undertake any misadventure, Pakistan’s response shall be even stronger than that of 27 Feb 2019," he said referring to a recent military conflict between the two countries.

Meanwhile, the hashtag #SaveKashmirFromModi was trending in India on Friday.

But behind the online posturing are nuclear-armed adversaries who’ve fought three wars since the British left the subcontinent in 1947 -- two of them over Kashmir -- which is claimed in full and ruled in part by both. Artillery and small-weapons fire are exchanged often and cross-border infiltrations are reported regularly but so far, the threat of a nuclear conflict has prevented the situation from spiraling out of control.

Increased Threats

Prime Minister Narendra Modi shocked the nation on Monday when his government took just a few hours to end seven-decades of autonomy in Kashmir by diluting Article 370 of the constitution.

Since then, India’s paramilitary troops have locked down the region, which for the last five days has been under an Internet and phone blackout and a strict curfew, its citizens shut out from the world and the fierce debate over Modi’s decision.

“A new era has been started in Jammu, Kashmir and Ladakh,” Modi said on Thursday night in an address to the nation, referring to the Himalayan regions in northern India. “Article 370 did not give the people anything apart from separatism and terrorism and kept them from progress -- it was being used as a weapon by Pakistan.”

At the same time, Pakistan Prime Minister Imran Khan warned of violence when the now five-day long curfew is lifted. “I am saying it today, they will blame us," Khan told a special sitting of his parliament. "They will do one more thing, I fear they will do ethnic cleansing in Kashmir.”

Observers say Modi’s actions have increased the risk of conflict.

Kashmiris have been placed in a very difficult situation, said Mahmud Durrani, former Pakistan general, national security adviser and ambassador to the U.S.

"This is like cutting their jugular vein," Durrani said. "There is going to be a very obvious reaction in the valley. They may be able to suppress it for a month, two months or four months but there will be definite reaction to it."

Still, he said Pakistan’s options were very limited, with diplomatic protests unlikely to have any impact on India. In the meantime, Durrani warned, "we must be careful about the boost that these jihadis will get all over India, Afghanistan and Pakistan. Terrorists and religious fanatics will draw mileage from this and they will become stronger."

Analysts shared similar concerns.

"We expect more decisions driven by Modi’s Hindu nationalist policy platform during his second term, risking intensified sectarian violence and civil unrest in the country," Marthe Hinojales, Asia politics analyst at Verisk Maplecroft said in note. "This dynamic suggests a continuing fragile bilateral relationship."

This is the second time the neighbors have clashed on Kashmir this year. After an attack killed 40 Indian security personnel, India responded with its first airstrikes on Pakistani soil since 1971, which led to an aerial dogfight. Khan said in an Aug. 6 parliament session called to discuss India’s move that any possible violence in response would be again blamed on Pakistan. The South Asian nation has denied involvement in the February attacks as well as accusations it harbors militants who engage in cross-border attacks.

Economic Pressures

Beyond long-standing territorial disputes, Pakistan is facing a whole other set of pressures.

It just took a $6 billion International Monetary Fund loan to avert an economic crisis and it’s seeking China’s help to avoiding tough financial sanctions, amid signs it is running out of time to meet global anti-money laundering and counter-terrorism financing standards.

Pakistan has been on the Paris-based Financial Action Task Force “grey” monitoring list since last year, after a campaign by the U.S. and European nations to get the country to do more to combat militancy and close financing loopholes to terrorist groups.

Given Islamabad’s financial challenges, it’s unlikely to opt for a war over Kashmir, said Ajai Sahni, executive director of the Institute for Conflict Management in New Delhi.

"There is no immediate intent on part of Pakistan to escalate to that level," said Sahni, adding it may intensify the efforts of militant groups to infiltrate India. "In terms of a credible calculus of risks this does not seems to be one of the options the Pakistanis are currently considering."

Within the Indian side of Kashmir, there will be protests and efforts to engineer terrorist attacks, said Sahni. "But with the kind of saturation of India’s security forces, I don’t think this is going to grow into anything large scale.’’

--With assistance from Ismail Dilawar.

To contact the reporters on this story: Faseeh Mangi in Karachi at fmangi@bloomberg.net;Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Unni Krishnan

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