ALMATY - Leaders from 16 nations met in Kazakhstan on Tuesday to seek ways to promote stability and fight terrorism, but the summit called to celebrate the group's potential became a forum for Pakistan and India to furiously trade blame for the conflict in Kashmir.

"The people of South Asia continue to pay a heavy price for the refusal by India to resolve the Kashmir dispute in accordance with resolutions of the United Nations and the wishes of the Kashmiri people," said Pakistan's president, Gen. Pervez Musharraf.

Indian President Atal Bihari Vajpayee in turn accused Pakistan of supporting terrorism.

"On Jan. 12, the president of Pakistan promised no organization would be allowed to indulge in terrorism in the name of Kashmir," Vajpayee said. "We have seen in the following months that cross-border infiltration has increased, violence in Kashmir has continued unabated and terrorist camps continue to exist across our border."

The conflict over the Himalayan province is but one of many in the territory covered by the new security forum, the Conference on Interaction and Confidence-Building Measures in Asia.

The group, known by the acronym CICA, could become a forum for resolving regional disputes over borders, use of resources such as water, and illegal migration, according to Kazakh diplomats.

Kazakh President Nursultan Nazarbayev, at whose initiative the CICA was founded, also called the flourishing drug trade and the rising illegal arms sales in Asia top priorities for the group to tackle jointly.

But it could be undermined by regional rivalries, including the competition for leadership in Central Asia between resource-rich Kazakhstan and Uzbekistan, which emerged as a key U.S. ally after allowing U.S. troops to be based there to support the anti-terrorist campaign in neighboring Afghanistan.

In addition to regional giants Russia and China, representatives of Israel, Iran and the Palestinians were seated around the same table Tuesday. Palestinian leader Yasser Arafat called in a written message for international support "to defend the Palestinian people against the Israeli occupiers." Israeli Deputy Prime Minister Natan Sharansky responded that Arafat had turned down Israel's offer of creation of a Palestinian state.

"The response was not only no, the response was terrorist attacks that killed 500 citizens and injured thousands," he said.

Many leaders appealed to Musharraf and Vajpayee to take steps to defuse their conflict before it ignites a full-fledged war.

"We cannot but be concerned about the explosive situation in the relations between Pakistan and India, which threatens to destabilize the situation in the whole Eurasian continent," Russian President Vladimir Putin said, adding that the world's leaders would do everything possible to head off war.

He then put a positive spin on the Musharraf-Vajpayee exchange at the summit - perhaps trying to drum up optimism for his mediation efforts later in the afternoon.

"Today we heard ideas that give us all hope," Putin said. "In the speeches of both leaders we can hear a readiness for dialogue."

All the former Soviet republics in Central Asia, except for Turkmenistan, which maintains a policy of neutrality, belong to the group, as do Afghanistan, Azerbaijan, Egypt and Mongolia.

Leaders from the 16 nations signed a statement on principles to promote stability in the region, including a commitment to increased cooperation to halt the spread of nuclear, biological and chemical weapons, and a declaration on fighting terrorism.

Nazarbayev met separately with Vajpayee and Musharraf on Monday, launching a mediation effort that was to continue through the day on Tuesday.

Putin and Chinese President Jiang Zemin were scheduled to hold nearly simultaneous meetings with the South Asian leaders on Tuesday afternoon - ensuring that even if the two refuse one-on-one talks, their messages will be delivered through intermediaries.