The prime minister of India, Atal Behari Vajpayee, says Pakistan is pushing it towards conflict, although India is against it.
"We do not want war but war is being thrust on us and we will have to face it," Vajpayee told a rally in New Delhi.
Tensions between the two nuclear powers have been rising steadily since an attack on the Indian Parliament earlier this month.
- FROM DEC. 13, 2001: Gunmen storm Indian Parliament, 12 dead
Fourteen people were killed, including the five assailants.
And on Tuesday it was reported two Indian army soldiers were killed in a fresh exchange of border fire between India and Pakistan.
India's high commissioner has left Pakistan and New Delhi is in the process of severing road and rail links between the two countries. India also moved ballistic missiles and troops to its border with Pakistan on Tuesday.
The Indian army has also ordered villagers who live near the border to move.
The two nuclear-capable neighbours have reinforced positions on either side of their disputed border in Kashmir since the Dec. 13 suicide attack.
New Delhi has blamed two militant groups based in Pakistan for the attack on the Parliament and demanded action against them.
Forceful statements from both countries
Pakistan's military leader, President Pervez Musharraf said his country's armed forces "are fully prepared and capable of defeating all challenges."
Musharraf also said relations between the two countries could improve if India sheds its "superiority complex" and deals with Pakistan "on an equal footing." Musharaff's speech marked the 125th birthday of his nation's founder. He criticized Muslim extremists for tarnishing Islam's image.
Pakistan said it briefly detained Maulana Masood Azhar, head of Jaish-e-Mohammad, one of two militant groups India accuses of planning the attack on its parliament.