ISLAMABAD, May 26 (IslamOnline & News Agencies) - Fears of war between the two nuclear-armed countries, Pakistan and India, escalated Sunday, May 26, as Islamabad test fired a second surface-to-surface missile despite international calls for calm.

The missile tested Sunday was a newly-developed short range Hatf-III (Ghaznavi) capable of carrying warheads up to 290 kilometers (180 miles) with great accuracy, an official statement said, Agence Farnce-Presse (AFP) reported.

Pakistani President Pervez Musharraf, whose government has announced a series of missile tests through to Tuesday, May 28, "congratulated the team of officers and men on their outstanding success", the statement said.

On Saturday, May 25, Pakistan test-fired a nuclear-capable medium-range Hatf-V (Ghauri) that could strike targets deep inside India as Musharraf said the country was ready for war, although it did not want conflict.

"We do not want war but we are not afraid of war. We are ready for war. Let no-one have any misunderstanding about this," he told an Islamic conference in the capital, drawing loud applause from the audience.

Indian Prime Minister Atal Behari Vajpayee brushed off the first test Saturday, saying it was not "significant", but warned there was a limit to India's tolerance of cross-border raids launched by militants from Pakistan into India.

"Our patience is not limitless," Vajpayee told reporters in the northern Indian hill station of Manali where he is on a three-day break.

A Pakistani army vehicle carries the long-range Ghauri missile, which was test-fired Saturday

In a swift reaction to Sunday's test, New Delhi said it was "not impressed" with Pakistan's testing. "We are not impressed by this. It has been done for demonstrative effect keeping in view the domestic audience," Indian defense spokesman P.K. Bandyopadhyay said.

Pakistan and India have around a million troops massed on their border and have been exchanging bellicose statements and artillery fire in the disputed Himalayan state of Kashmir for the past week.

The stand-off began in December when India blamed Pakistan for an attack on its parliament, and escalated on May 14 when 35 people were killed in a massacre in Kashmir, which New Delhi again blamed on Islamabad.

The threat of war has drawn intense international pressure on the two capitals, and concern deepened when Pakistan said it would conduct a series of missile tests from Saturday through Tuesday.

Pakistan said the tests were routine and had "nothing to do with the current situation", but analysts say they are a clear flexing of muscles by the smaller state after threatening comments by its giant neighbor.

U.S. Secretary of State Colin Powell described the first test as "disappointing" and called on the neighbors to pause and "reflect" on the brewing conflict.

"I don't think it was a useful thing to do now," he said in the Russian city of Saint Petersburg where U.S. President George W. Bush held a summit with Russian President Vladimir Putin.

Putin said Russia also regretted the missile test, and offered to mediate between the Pakistani and Indian leaders at a June 3-5 conference in Kazakhstan.

"I hope they will come, so that we can discuss the matter here and prevent the further escalation of the conflict," he said.

Meanwhile, Pakistani and Indian troops traded heavy fire along their disputed border in Kashmir Sunday, but there were no reports of casualties on the Pakistan side, officials said.

The exchange of fire took place in Samahni sector in southern-most Bhimbher district, which faces Nowshera sector in the Indian administered zone of the Himalayan state.

"Indians are heavily shelling Samahni sector villages but we are yet to receive any information about human casualties," an administration official told AFP from Bhimbher.

"Pakistani troops are returning the unprovoked fire by the enemy," he added.

The official said firing continued intermittently overnight but the intensity of the bombardment rose by early morning.

Samahni and adjoining Chumb sector have witnessed artillery duels for the past several days, killing three and forcing thousands of people in forward locations to flee and take shelter on safer ground.

Indian shelling has killed at least 31 civilians in Pakistan-controlled Kashmir since earlier this month.

On the other side of the Line of the Control (LoC), 15 Indians have been killed, including five overnight in R.S. Pora sector.

Hostilities flared in the wake of an attack in Jammu, the winter capital of Indian Kashmir, which left 35 dead - mostly women and children.