Since terrorists gunned down 217 people on November 26 in Mumbai, India has withstood internal pressure to unleash a military attack on Pakistan.
Internal dynamics and diplomatic responses are still evolving since the Nov. 26-29 attack.
With relations fraught between the two countries, here is a look at some scenarios that could unfold.
War: Highly improbable. No one, except the terrorists, would want it. Indian Foreign Minister Pranab Mukherjee says India is keeping all options open, comments the Indian media have widely interpreted to mean that a military response is still possible, but Mukherjee says that was not his intent. He has said previously that war "is no solution".
Tensions flared when Pakistan accused Indian warplanes of air space violations on Dec. 13 and said its own fighter jets were scrambled.
India denies any incursion. Any kind of Indian military action is likely to provoke retaliation, either from jihadis or worse the Pakistani military. India's strength lies in its ability to win global diplomatic support to pressure Pakistan to clean its house of jihadis. Pressure on New Delhi to pursue a military option would rise if India was attacked again.
Peace Process: India has imposed a "pause" on a peace process begun in 2004, which had brought better ties, and also cancelled a cricket tour to Pakistan next month.
India wants Pakistan to seriously crack down on groups that analysts say have been favoured by its Inter-Services Intelligence agency.
Pakistan denies any links to the Mumbai attacks, blaming "non-state actors", and says India has provided no evidence for it to investigate.
India says it has given Pakistan specific details, including an account by the lone surviving gunman. A crackdown like one by then military ruler General Pervez Musharraf in 2002, which was widely regarded as a sham, will satisfy neither New Delhi nor Washington.
President-elect Barack Obama's incoming administration is expected to encourage settlement of the Kashmir dispute, a step it also sees as part of the equation to stabilise Afghanistan.
India probably realises it's better to engage Pakistan than ignore it in the long-run, and it would like to help civilian leaders establish authority over the generals. US pressure to move more swiftly in peace talks won't cut much ice with India, so long as it feels uncomfortable about the durability of Pakistan's democracy.
In the short-run the Indian government has an election to fight by May, and will need to show its public results before it resumes the peace process.
No War, No Peace: If, analysts say, the Pakistani military refuses to abandon old terrorists, there will be no war and no peace.
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Instead there's a real danger both sides could use non-state proxies to destabilise each others' borders.
It would be a return to the pre-2002 era, and the world will be haunted by periodic crises between the neighbours.
That, in turn, will complicate the West's efforts to stabilise Afghanistan. Some jihadi groups that had been fighting in Kashmir have built ties with al Qaeda and the Taliban in Pakistan's ethnic Pashtun tribal belt on the Afghan border, which the Pakistan army is struggling to control.
If these groups are allowed to thrive they will continue to provide gateways for alienated young Muslims to join a global jihad against their own governments.
Repercussions for India: The Indian government faces widespread voter anger at the security and intelligence failures that led to Mumbai.
The Opposition BJP has made it a major campaign issue and many analysts expect an election backlash against the ruling Congress party.
But recent state poll wins by Congress, as well as the high-profile appointment of former finance minister P Chidambaram as the new Home Minister, have helped take the wind out of the BJP's sails. The BJP has also been criticised in some quarters for being opportunistic in making terrorism an election issue. The government has rushed through a tough anti-terror law, seen as a bid to allay public anger.
Repercussions For Pakistan: Prime Minister Yousaf Raza Gilani's offer on Nov. 28 to send the head of the Inter-Services Intelligence spy agency to New Delhi following a request from Prime Minister Manmohan Singh went down badly in some quarters of the military.
But since then there has been no indication the civilian government and military leadership are out of step, even if they disagree on whether the militants should be protected or dumped.
If the crisis worsened, it might bring any differences into the open, risky for a young civilian government dependent on army support for Pakistan's transition to democracy.
Pakistan already reels from an Islamist insurgency in the northwest. A crackdown on militant groups like Lashkar-e-Toiba and Jaish-e-Mohammad based in the central province of Punjab could end up driving more of their fighters into the arms of al Qaeda and the Taliban in the northwest.
That would reinforce the insurgency in Afghanistan and pose more dangers for Pakistan.
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