Pakistan yesterday said it will release a captured Indian pilot as a "peace gesture", taking a step towards rapprochement as clashes between the nuclear-armed rivals ignited fears of a disastrous conflict.
The pilot, Wing Commander Abhinandan Varthaman, has become the face of the crisis since he was shot down in a rare aerial engagement between the South Asian neighbours over the disputed region of Kashmir on Wednesday.
With anger boiling over his capture in India, analysts have touted him as a potential trump card for Islamabad.
"As a peace gesture we are releasing the Indian pilot tomorrow," Prime Minister Imran Khan told a joint session of parliament.
Parliamentarians stamped their feet in approval at his statement, the first sign of a potential thaw after a dangerous sequence of events between the two countries sent tensions soaring.
Tit-for-tat raids across their hair-trigger border have alarmed world powers including China and the US, who have urged restraint. Russia, Saudi Arabia yesterday offered help to diffuse crisis between the arch-rivals.
Pakistan has said it downed two Indian fighters, while India confirmed it had lost one plane and claimed it had shot down a Pakistani jet.
"I am afraid of miscalculations," Khan said. "We should not even think of war, especially in view of the lethality of the weapons that we have." However he warned that his Indian counterpart Narendra Modi should not misconstrue his desire to de-escalate as "weakness".
"India must know that we will be forced to strongly retaliate against any Indian action in the future," he said.
Khan did not give details of when or where the pilot would be released.
In response, top Indian military chiefs said its forces will remain on a "heightened" state of alert despite Pakistan's promise to free the pilot.
Top generals from the Indian air force, army and navy also renewed claims that India had shot down a Pakistani F-16 jet in the air battles after an attack Wednesday on military installations in Indian-administered Kashmir.
"We are fully prepared and in a heightened state of readiness to respond to any provocation from Pakistan," said the army's Major General Surendra Singh Mahal at a press conference.
He said ground-based air defence weapons had been "put on high alert" along the de facto border with Pakistan in Kashmir, across which both sides had fired shells in recent days as the crisis escalated.
The top military officials also unveiled fragments from a missile they said matched the Pakistani F-16 fighter jet that crossed into Indian airspace and was shot down.
Pakistan has denied New Delhi's assertions that one of its fighters was downed.
India's Air Vice Marshall RGK Kapoor said Pakistan's decision to free the pilot, though welcome, simply followed international norms around prisoners of war.
Wednesday's dogfight and the pilot's capture sparked fears of India and Pakistan -- who have fought two wars and countless deadly skirmishes over the Himalayan region -- entering a cycle of retaliation and counterattacks that could spiral out of control.
Pakistan has closed its airspace indefinitely, stranding thousands of passengers worldwide; and the army said yesterday its troops were on high alert along the Line of Control.
Authorities have tightened security across the country, with hospitals on alert and leave for police and other security officials cancelled in some cities.
Analysts have said the pilot's fate, and his safe release, could prove central to the neighbours pulling back from the brink.
US analyst Michael Kugelman said it was a "big decision to part with a bargaining chip".
In India the announcement was being seen as a diplomatic victory for New Delhi, with commentators saying Islamabad had yielded under pressure.
The hashtag #WelcomeBackAbhi was swiftly trending.
US President Donald Trump voiced optimism earlier yesterday that the tensions could soon be resolved.
"We have had some reasonably decent news... Hopefully that's going to be coming to an end," he said of the crisis, speaking to reporters in Hanoi after a summit there with North Korean leader Kim Jong Un.
Indian government sources said they were unsure what Trump was referring to.
The confrontation erupted after a suicide attack in Indian-held Kashmir killed 40 Indian troops on February 14.
New Delhi blamed the Pakistan-based Jaish-e-Mohammad militant group for the attack. Twelve days later Indian warplanes launched a strike inside Pakistani territory, hitting what it said was a militant training camp.
An infuriated Islamabad denied major casualties or damage, but a day later launched its own incursion across the Line of Control which sparked the dogfight that ended in Abhinandan's capture.
Meanwhile, troops from India and Pakistan continued exchanging fire yesterday in the Poonch district since the morning, according to a statement from the Indian army.
Aijaz Ahmad, a resident in the Indian-controlled portion of the district, said he was still hearing heavy firing yesterday afternoon.
Pakistan said the firing began overnight.
"The firing continued in intervals throughout the night. It was moderate," said Shaukat Yusufzai, an administration official in the Pakistan-controlled part of Poonch.
India is building more than 14,000 bunkers for families in Jammu and Kashmir state living close to the border, hoping to keep them safe near their homes rather than evacuate them.