Indian Prime Minister Manmohan Singh summoned his military chiefs to review New Delhi's "defence preparedness" while his foreign ministry advised Indians not to travel to Pakistan, saying it was unsafe for them to be in the country.
The developments sent ties plummeting to their lowest point since late 2001, when Kashmiri militants staged a brazen attack on the Indian parliament -- an attack New Delhi blamed on the Pakistan-based extremist group Lashkar-e-Taiba.
India has blamed the same group for the Mumbai attacks and has repeatedly said Islamabad is not doing enough to rein in militant groups, a claim that Pakistan rejects.
The nuclear-armed South Asian neighbours -- which have fought three wars since independence from Britain in 1947, two of them over Kashmir -- have said they do not want war this time, but warn they would act if provoked.
Prime Minister Yousuf Raza Gilani reiterated Friday that Pakistan was a "peace-loving" nation, telling reporters in the eastern city of Lahore that while Islamabad had no "aggressive designs", it would respond if provoked, the Associated Press of Pakistan news agency reported.
In Islamabad, senior defence and security officials said troops were being moved from the northwest tribal areas bordering Afghanistan, hotbeds of Taliban and Al-Qaeda activity, to the eastern border near India."We do not want to create any war hysteria but we have to take minimum security measures to ward off any threat," a defence ministry official told AFP on condition of anonymity.
He added that leave for "operational" armed forces personnel had been cancelled "as a defensive measure".
A top security official, who also asked not to be named, explained that a "limited number of troops have been pulled out from snowbound areas on the western border where they were not engaged in any operation".
Pakistan's army and air force have recently scaled back their operations against Taliban-linked militants in both the Swat valley and the Bajaur tribal area bordering Afghanistan. Both operations were launched in mid-2008.
Any major shift of Pakistani troops out of the tribal areas would likely spark concern in Washington and other Western capitals, as it could open the door to more cross-border militant attacks on foreign forces in Afghanistan.
"We continue to urge both sides to cooperate on the Mumbai investigation as well as counterterrorism in general," White House spokesman Gordon Johndroe told AFP.
"We also do not want either side to take any unnecessary steps that raise tensions in an already tense situation."
Another senior Pakistani security official told AFP the new deployments on the Indian border were not in "significant numbers but only in areas opposite the points where India is believed to have brought forward its troops".
The defence ministry official said authorities had noticed the movement of Indian troops toward the border near Lahore, and that they believed India had also cancelled military leave.
Pakistan's chief military spokesman Major General Athar Abbas declined to comment.
New Delhi has said its slow-moving peace process with Pakistan is now on hold in the wake of the Mumbai attacks last month, in which 172 people including nine of the gunmen were killed.
Islamabad has said it is willing to cooperate with India in investigating the carnage, but says New Delhi has offered no proof that Pakistani nationals were involved -- a claim dismissed by Indian Foreign Minister Pranab Mukherjee.
"We have ample evidence... to prove that elements based in Pakistan carried out the Mumbai attacks," Mukherjee said.
"Pakistan should not divert attention from the real issue of taking action against terrorists by raising war hysteria," he told reporters in New Delhi.
Singh was meanwhile meeting the chiefs of India's army, air force and navy to discuss the current security situation, an official in his office said.
The Indian foreign ministry meanwhile advised its nationals to stay away from Pakistan. Spokesman Vishnu Prakash said such travel would be "unsafe".