ISLAMABAD: The United States (US) is “closely” monitoring the situation after an attack on tourists in Indian-administered Kashmir, the State Department said on Thursday, as both India and Pakistan teeter on the brink of another conflict.
India and Pakistan have come close to a war as the two nuclear-armed South Asian neighbors downgraded diplomatic and trade relations, closed the main border crossing and revoked visas for each other’s nationals in tit-for-tat moves this week.
Indian Prime Minister Narendra Modi has vowed to pursue and punish the gunmen responsible for killing 26 civilians in the tourist hotspot of Pahalgam on Tuesday, accusing Pakistan of supporting “cross-border terrorism.” Pakistan has denied it was behind the attack, claimed by a previously unknown militant group.
“As we all know, it’s a rapidly changing situation and we are monitoring it closely,” State Department spokesperson Tammy Bruce said during a press briefing.
The statement came after Modi vowed to hunt down the gunmen responsible for killing 26 civilians in Pahalgam and the Indian police identified two of the three fugitive gunmen as Pakistani.
“I say to the whole world: India will identify, track and punish every terrorist and their backer,” Modi said, in his first speech since Tuesday’s attack in the Himalayan region. “We will pursue them to the ends of the Earth.”
Islamabad has called the attempts to link Pakistan to the Pahalgam attack “frivolous” and vowed to respond to any Indian action.
“Any threat to Pakistan’s sovereignty and to the security of its people will be met with firm reciprocal measures in all domains,” a Pakistani government statement said.
Kashmir has been divided between India and Pakistan since their independence in 1947, with both claiming the territory in full but governing separate portions of it. The Muslim-majority region has been the cause of two of their three wars and also witnessed a bloody insurgency against Indian rule.
Bruce, however, declined to comment on the status of the disputed region.
“We, of course, are not now taking a position on the status of Kashmir or of Jammu either,” she said.
Also on Thursday, the United Nations urged both India and Pakistan to show “maximum restraint” as the nuclear-armed rivals imposed tit-for-tat diplomatic measures.

KARACHI: Pakistan has sought support of the Asian Development Bank (ADB) for the issuance of its yuan-denominated Panda bond, the Pakistani finance ministry said on Thursday.
The statement came after Pakistan Finance Minister Muhammad Aurangzeb’s meeting with ADB President Masato Kanda in Washington D.C., wherein the two sides discussed their Country Partnership Strategy 2026-2030 and budgetary support.
Pakistan plans to launch yuan-denominated Panda bonds in June to enhance its presence in Chinese capital markets and raise approximately $200 million from Chinese investors, following upgrades in its sovereign ratings by major credit agencies.
Islamabad is being advised on the issuance of Panda bonds by the China International Capital Corporation, a partially state-owned financial services company. However, the latest figure shared in Jan. is lower than the $300 million targeted by Pakistan last year.
“The minister requested ADB’s support for a partial credit guarantee for the issuance of Pakistan’s Panda bond,” the Pakistani finance ministry said.
The development comes more than a week after global ratings agency Fitch upgraded Pakistan’s foreign currency credit rating to ‘B-’ from ‘CCC+’, citing increased confidence in the country’s progress on narrowing its budget deficits.
The upgrade also reflects confidence that the country would implement structural reforms, supporting its International Monetary Fund (IMF) program performance and funding availability, according to Fitch.
Pakistan’s economy had been teetering on the brink of default ever since inflation rose to a record high in May 2023 and reserves started shrinking, but has seen some respite thanks in part to a $7 billion bailout program from the IMF.
Aurangzeb and the ADB president also discussed the Bank’s Country Partnership Strategy 2026-2030 for Pakistan and agreed to fast-track the project’s execution, according to the Pakistani finance ministry.
“He also expressed hope that budgetary support from ADB would materialize this year and assured the participation of Pakistan’s delegation in the CAREC (Central Asia Regional Economic Cooperation Program) meeting scheduled for November 2025,” it added.
Pakistan is a founding member of the ADB. Since 1966, the bank has committed over $52 billion in public and private sector loans, grants, and other forms of financing to promote inclusive economic growth in Pakistan and improve the country’s infrastructure, energy and food security, transport networks, and social services.