Asia-watchers fear that recent tentative improvements in relations between India and Pakistan could be reversed by the Mumbai attacks.
The two nuclear-armed states have been to war three times since the partition of India in 1947 and the threat of further military conflict is ever present.
Many experts say homegrown Indian Islamic extremists are likely to be behind the Mumbai massacre, albeit possibly with support from foreign groups.
But New Delhi has pointed the finger at its troubled neighbour.
Indian Prime Minister Manmohan Singh yesterday blamed "external forces" for the violence, a phrase which many have taken to mean Pakistani militants.
India's foreign minister, Pranab Mukherjee, claimed today that "elements in Pakistan" were behind the attacks.
Worsening Indian-Pakistani relations are bad for everyone - apart from the radical Islamists who would like to topple established governments in South Asia and the Middle East.
Not only could simmering tensions in the disputed region of Kashmir - which is currently undergoing elections - rise to the surface once again.
Pakistan's new president, Asif Ali Zardari, could also be seriously destabilised if credible evidence emerges suggesting the Mumbai terrorists were backed by the Pakistani intelligence services.
Mr Zardari has worked on improving relations with India since being elected in September, and even offered to introduce a "no first strike" nuclear policy at the weekend.
Pakistan has also just disbanded the political wing of the military-run Inter-Services Intelligence (ISI) agency.
But the Pakistani state does not pull in one direction, and the political leadership, army and intelligence services often pursue conflicting agendas.
In the past the ISI has been accused of supporting Islamist militants in Kashmir and Afghanistan.
And insurgents linked to the Taliban and al Qaida continue to hide in Pakistan's tribal areas along the Afghan border.
Mr Zardari's authority would be severely weakened if it could be proved that ISI elements had helped those responsible for the Mumbai attacks.
There is no suggestion that he might be involved himself, but it would bolster fears that he is not in full control of the Pakistani state.
In a country that has suffered a series of military coups and has a bubbling Islamist insurgency, this would be a worrying development.
This is one reason why Pakistan has been so eager to work with the Indian authorities.
Today it announced the head of the ISI would be sent to India to help investigate the Mumbai attacks.
But there is also a hint of defensiveness in Islamabad's response to the terror.
Pakistan's defence minister Ahmed Mukhtar condemned the attacks but pleaded: "We should not be blamed like in the past."