Some Indian leaders blamed Pakistan for Lone's death while Pakistan accused India's "occupying forces" in Kashmir.
The rising tensions are prompting a string of visits by high-level officials to try to find a way out.
The EU's External Affairs Commissioner, Chris Patten, said during a visit to Islamabad yesterday that the two countries should work together to stop "terrorism".
"One of the things to which I will be drawing attention to repeatedly is the Security Council Resolution 1373 which Pakistan has signed and every European Union country has signed," he told a news conference.
Resolution 1373, adopted last year after the Sept. 11 attacks on the US, calls on countries to work together to stamp out terrorist acts.
"I will be drawing attention to a relationship between that Security Council resolution and the current situation," said Patten, who was due to visit New Delhi later this week.
He would be followed to the region next week by British Foreign Secretary Jack Straw, and later by US Deputy Secretary of State Richard Armitage.
Straw urged the international community on Tuesday to act to defuse the crisis.
"The possibility of war between India and Pakistan is real and very disturbing," Straw said in London. "This is a crisis the world cannot ignore."
Analysts expect India to give some time to the international community to try to end the deadlock.
From India's point of view this primarily means getting the US to force Musharraf to crack down on militants.
But analysts say diplomats could also try to convince India that Musharraf's room for manoeuvre may be limited, given the militants may be out of his control.
And given the high state of military preparedness, the situation could spin out of control if there is another major militant attack on India.
"The irony is that the timing of the conflict may be decided neither by New Delhi nor Pakistan but by some terrorist," said Indian defense analyst Brahma Chellaney.
"Not all Pakistani terrorists are in the control of Musharraf and his Cabinet. The trigger of an open confrontation might be provided by elements not within control of Musharraf," he said.
Since October 1947, when the then Hindu ruler of Kashmir decided to join mainly Hindu India rather than Islamic Pakistan, the region has fuelled rivalry between the two countries.
India, which holds 45 percent of Kashmir, considers it an integral part of its territory. Pakistan, which controls a third, wants a plebiscite to determine the wishes of the Kashmiri people. China holds the remainder of Kashmir.
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