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Crouched in the middle of an intersection littered with broken glass, an Indian paramilitary officer shoulders his rifle and squints down the barrel at a gang of youths shouting insults and throwing stones.

Eleven protesters have died in this kind of standoff in the past three weeks, as angry crowds and security forces clash in the rebellious Kashmir valley. Nobody will die on this sunny day, however: Instead of shooting, the paramilitary officer puts down his rifle and picks up one of one of the stones that rain down on his tin-roofed outpost. He lobs it back at the demonstrators, then sits down in the shade as if waiting for the mob to settle down by itself.

The officer's gesture reflects an important, and somewhat mysterious, development in the conflict that has gripped the mountainous region between India and Pakistan for more than two decades.

This insurgency, once ranked among the deadliest wars in the world, killing tens of thousands of people, has diminished dramatically. The number of deaths in the January-to-May period plunged from 1,183 in 2006 to only 141 this year.

This de-escalation makes Kashmir's unique among the insurgencies in Muslim regions today, as a clash once fought with assault rifles and rocket-propelled grenades makes a shaky transition to a mainly political dispute. Key battles are no longer decided with bullets but with slogans and hurled stones.

But the conflict doesn't disappear when the shooting stops. India's Prime Minister, Manmohan Singh, gave an eloquent speech in Toronto this week about another fading resistance movement in his country, the struggle for a Sikh homeland, saying that "the challenge is how to move ahead." He faces an even tougher problem with the historic grievances in Kashmir: Two days after his speech, Mr. Singh was back in New Delhi holding an emergency meeting about riots in the valley.

Hundreds of thousands of Indian security forces remain stationed in Kashmir, and they have become notorious: Human-rights groups complain of torture, disappearances, rape and extra-judicial killings. Residents still fear walking the streets without identity cards, and they're increasingly resentful of the heavy security apparatus.

"The difficult thing is now to get the security forces to change their mindsets," Kashmir Chief Minister Omar Abdullah said. Sipping golden tea in the garden of his home in Srinagar, the state's most senior politician did not pause for any self-congratulation about the declining violence. Instead, he launched immediately into a discussion of the government's struggle to switch gears from counter-insurgency to a more benign system of law enforcement.

"They're used to people coming at them with guns and therefore responding in kind," he said. "Now, people - at least a small section of youngsters - are coming at them with stones. And yet their mindset is still to respond with guns."

THE RETURN OF THE REPRESSED

The turmoil in Kashmir goes back to its history as a princely state with a degree of autonomy, where the British Empire faded into the Himalayan mountains. After India gained sovereignty in 1947, Kashmiri dreams of independence were quashed as the territory became a battleground between India and Pakistan, which fought three wars and still have not formally agreed on the status of Kashmir.

On the side controlled by India, a flawed election led to an outbreak of political violence in 1989. The insurgency grew throughout the following decade; some analysts say it was fuelled by Pakistan-backed militants who drove the Soviets out of Afghanistan and went looking for a new holy war. Thousands of non-Muslims fled, and insurgents encouraged the Sunni majority to rise against the Hindu-dominated central government.

The conflict reached its peak in 2001 and then began a steady decline, but the denouement has been slow and bitter, marked by demonstrations and riots. Violence is down, but the public's anger has never been more obvious.

Arshad Hussain, a psychiatrist at Srinagar's mental hospital, has a partial explanation. He and his colleagues studied 20 families that suffered losses or trauma in the conflict, and found that Kashmiris are less likely to show signs of post-traumatic stress than might be expected.

People became emotionally resilient, Dr. Hussain said, because they came to see violence as an ordinary facet of their lives.

But now that the situation seems less dangerous, he said, people find themselves able to express emotions they suppressed for years. "The anger is just more visible now."

In a courtyard outside the doctor's office, hospital staff herded a crowd of naked patients under a cascade of water from a roof reservoir, yelling at them to wash.

Some people who have been scarred by the conflict may never recover, Dr. Hussain said. "We have people who will not walk through the downtown. They have nightmares. They even get scared of the television."

The scarred landscape of the city is healing in an equally uncertain way. Cinema halls taken over by the security forces and converted into outposts, festooned with barbed wire, remain as hulking reminders of the Indian military presence. But the piles of sandbags and machine-gun nests on main roads have been replaced in recent years with wood-panelled booths ("like tourist kiosks," a local journalist said, "so they don't scare vacationers") and interrogation centres notorious for torture have been shut down.

STONES THROWN AND DREAMS DREAMT

At the largest graveyard for war victims, near the Eidgah mosque in a poor neighbourhood of Srinagar, the grass is thick and the stones seem weathered by many winters. On a recent visit, the site had only two fresh graves: One for Tufail Matoo, a 17-year-old reportedly killed when a tear-gas canister struck him in the head on June 11, and one for Javid Ahmad Malla, a 25-year-old shot dead a week later while a mob was trying to set fire to an armoured vehicle.

Their deaths have become part of a cause-and-effect cycle gripping the city this summer, as crowds mourning the dead get caught up in fresh clashes with the authorities, provoking more killings.

Lingering among the headstones was a neighbour of the most recent victims, a heavy-set young man wearing glasses. Zuhaib Hassan was only two years old in 1991, when his father died in crossfire and joined the rows of dead in the cemetery. He looked genuinely puzzled when asked why young men like him have decided to throw stones instead of picking up guns to renew the insurgency.

"I don't know," he said. "There is still anger in every person, but now we are trying something different."

Mr. Hassan's plans for revenge involve getting rich. He is now studying for an MBA at the University of Kashmir and intends to join the private sector - it doesn't matter what kind of business he takes up, he said, but he refuses to work for the government. His father had been a government employee, an engineer at a municipal office, but like many in the next generation his son views taking a government job as a loss of freedom.

The Indian government has, in fact, used employment schemes as a way of subduing the rebellious valley.

"We have 450,000 government employees, the highest ratio in India," said Zubair Ahmad Dar, a program officer at the Centre for Dialogue and Reconciliation. Many other workers in the state, which had a 2001 census estimate of 10 million residents, benefit from temporary projects or military spending.

The flood of government money has become a means of control, Mr. Dar said. "Private-sector employees will not be at the government's beck and call."

Even though Kashmir has little industry, relying on horticulture, tourism and handicrafts, the state is relatively prosperous. Officially known as Jammu and Kashmir, the state government estimated its gross domestic product grew more than 6 per cent during the fiscal year ending in 2008, up from an anemic 2 per cent in 2001.

Kashmir hasn't yet caught up with the aggressive growth in India as a whole, but compares well against some neighbouring states in the north. A higher percentage of people in Kashmir own cars and televisions than the national average in India, and more of them have access to electricity. A gleaming new airport opened last year, and a railway now under construction will link Srinagar with the rest of India.

HOW MANY TROOPS IS TOO MANY?

On a road trip out of the summer capital, into the rural areas most likely to resist the government's influence, a visitor can see steamrollers maintaining the well-paved highways and work crews digging trenches for telephone lines. News of the economic boom has spread to other parts of India, attracting thousands of migrant workers who live in tents beside the road.

Also visible in the countryside is the eerie presence of heavily armed security forces, dotted incongruously among the orchards and lush fields.

The U.S. Army's field manual for counter-insurgency operations, written by the man now commanding all North Atlantic Treaty Organization forces in Afghanistan, General David Petraeus, calls for 20 security personnel for every 1,000 citizens in areas afflicted by insurgency.

The size of Kashmir's security forces has become a subject of some dispute, but most observers accept a rough figure of 700,000 to account for all of the various police, military and paramilitary units. By that estimate, India has established a force-to-population ratio of roughly 70 per 1,000.

The Indian government claims only half that many are deployed; even so, the sheer density of troops can look almost absurd, as sweating young soldiers with automatic rifles stand around watching the city traffic or swatting flies in farmers' fields. It's far beyond the number of troops per 1,000 residents deployed against insurgencies in Northern Ireland (20), Bosnia (15), Iraq (18 to 22) and Afghanistan (13 to 15).

However, some analysts have argued that conventional wisdom on troop density is flawed, and that successful counter-insurgency requires a much greater number of soldiers. This school of thought draws inspiration from the successful British campaign from 1948 to 1960 in what became Malaysia, which employed about 60 to 64 security personnel per 1,000 residents.

The Indian experience in Kashmir is quickly becoming a similar case study. A former intelligence officer in Delhi attributed the government's success to a willingness to be "tough," sending sufficient forces and giving them a strong mandate.

However, such cold-blooded calculations are highly unpopular in the valley itself, where locals like to point out that even the crushing numbers deployed in the Vietnam war - 85 to 90 security personnel per 1,000 residents - could not prevent a bloody debacle.

"Most of the things happening now in Kashmir are a result of over-militarization," said Naeem Akhtar, chief spokesman for the People's Democratic Party, the leading opposition faction in the state legislature. He argues that recent decreases in violence have happened despite the security forces, not because of them.

"This is one of the few societies that has recovered from gun culture," Mr. Akhtar said, sitting in his living room, listening to the delighted shrieks of children playing cricket in the street. "The people of Kashmir have made a fundamental shift in their manner of expression. Before, it was the gun. Now, it's the ballot."

Despite this shift, he said, there's a grimness to the result. "This is peace, yes, but it's the peace of the graveyard. It's containment of militancy. Yes, the state has succeeded. But it hasn't addressed the sentiments of the people."

PROGRESS, BUT THE 'BLACK LAWS' REMAIN

The most common sentiments in Kashmir these days are variations on a single theme: the lifting of the security forces' heavy presence. The slogan spray-painted on walls, and chanted by young men who battle the police, is "Go India Go," a blanket demand for Indian forces to withdraw.

A pullout seems unlikely, and India's top generals have argued that it's too early for any reduction in troop numbers. The military also resists the widespread demand for a repeal of what Kashmiris call the "black laws," legal instruments such as the Armed Forces Special Powers Act (AFSPA) that give the authorities broad permission to arrest, search and shoot to kill without fear of individual responsibility. Amnesty International says the AFSPA has facilitated grave human-rights abuses.

Even the Chief Minister himself complained about the heavy-handed laws. Soon after his election last year, Omar Abdullah promised to work with the central government to get the laws repealed and send Indian troops "back to the barracks."

Those promises sound increasingly hollow, however, as it has become clear that the top elected official in Kashmir has little ability to persuade New Delhi to change its rules.

Nor has Mr. Abdullah's own administration shown much restraint, reacting to street protests this summer by calling for extra backup from the military and imposing daytime curfews. Neighbourhoods have been effectively shut down, shops closed and people discouraged from leaving their homes.

Authorities also banned cellphone text messages, fearing their use by riot organizers.

The clampdown only heightened tensions, with 53 paramilitary officers suffering injuries during five particularly intense days of unrest. Local news photographers found a gang of youths beating an officer as he lay helpless in the street, and the images appeared on front pages across the country.

Despite the government's successes so far, the historical odds of ending any insurgency are poor. A study by the Rand Corporation found that governments have won only 31 per cent of counter-insurgency wars since the end of the Second World War. An additional 22 per cent of those conflicts ended with no clear winner; insurgents won 28 per cent of the time and 18 per cent are ongoing.

If a solution exists, Mr. Abdullah says he is convinced that it will be the result of the minimum possible use of security forces.

His own house is a testament to that strategy. His summer residence looks more like a ski chalet than the sort of bunker inhabited by many wartime leaders in the tougher parts of South Asia.

The metal detector at the front gates does not seem to work and the armed guards hanging around the courtyard give visitors only a cursory frisking.

The compound has none of the accessories that would be common in Afghanistan or Pakistan - no blast walls and no mesh netting to prevent a hand grenade from being lobbed into the flower garden, where Mr. Abdullah lounges under a parasol.

An aide to the minister admits that the one layer of security that frightens him is the pair of boxers lolling on the lawn. The dogs wake up quickly and confront strangers with a menacing growl; Mr. Abdullah's assistant backs away with a terrified look.

The minister shouts at the dogs from his front porch, but they don't retreat. He charges at them, waving his arms and yelling, and they reluctantly obey their master. He chases them away behind the house, before returning to discuss his government's struggle to rein in security forces.

If he senses any parallel between calling off his dogs and his current problems with India's military presence in his scenic valley, the politician gives no hint.

But he repeatedly comes back to the same point, about calibrating the use of force: "I don't think it's possible to just take a tough approach to counter-insurgency," he said. "Inevitably a tough approach alienates the people."

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