"Completion of fencing is almost over. There may be some patches left," Pranab Mukherjee told reporters at the end of his maiden two-day trip to Indian Kashmir after becoming new defence minister.

"I think they (soldiers) have done a very good job. I do hope it will prevent the infiltration and exfiltration (of militants)," he said after inspecting the fencing at the Line of Control (LoC) -- the de facto border that divides Kashmir between India and Pakistan.

India accuses Pakistan of arming Muslim rebels and facilitating their inflitration into Indian Kashmir, which is in the grip of a 15-year-old insurgency against Indian rule.

Pakistan, which controls about a third of the disputed region, rejects the charges but calls the rebellion a "freedom struggle" by indigenous Kashmiri groups.

When asked by a reporter whether the fencing had been completed with the "tacit approval" of Pakistan, Mukherjee said, "Of course, the ceasefire itself is an indication of moving towards the positive direction. Resumption of talks is also a signal that we are moving in the positive direction."

He added, however: "I would not like to rush to any conclusion right now."

India and Pakistan in November agreed to a ceasefire along the LoC, putting an end to daily exchanges of artillery and machine gun fire.

"I hope the ceasefire that began from November last year will continue. It has created an atmosphere," said the minister, flanked by India's army chief General N.C. Vij.

"The peace initiatives which have been taken and the resumption of talks with Pakistan at the official level may defuse the tension," he said, referring to this week's secretary-level talks between the two neighbours in New Delhi.

India and Pakistan came to the brink of a fourth war when India's parliament was attacked in December 2001 by rebels New Delhi blamed on pro-Pakistan militants.

Mukherjee Wednesday ruled out reducing troops along the LoC, saying militants were waiting to infiltrate from Pakistan-administered Kashmir.