The prospect of war between India and Pakistan is the stuff of nightmares. Since the British quit the subcontinent in 1947, the South Asian rivals have come to blows four times already, three times over the Himalayan region of Kashmir alone. Claimed in its entirely by both New Delhi and Islamabad, it is one of the world’s most beautiful areas and also one of its most militarized, divided between the two nations by a de facto border called Line of Control (LoC). With both countries now in possession of nuclear weapons, another war, many fear, risks tipping into a potentially apocalyptic confrontation .

Which is why all eyes have been on Indian Prime Minister Narendra Modi ever since four gunmen attacked an Indian military base near the LoC on Sept. 18. Eighteen Indian soldiers died in the raid on the base in the Kashmir town of Uri, making it the worst such attack in more than two decades. India says the gunmen came from across the LoC, a charge Pakistan rejects.

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As tensions rise, prominent voices from within Modi’s right-wing Bharatiya Janata Party (BJP) have turned up the heat with war-like rhetoric. Ram Madhav, a BJP leader and close ally of Modi’s, signaled that the days of Indian restraint were over, saying : “For one tooth, the complete jaw. If terrorism is the instrument of the weak and coward (sic), restraint in the face of repeated terror attacks betrays inefficiency and incompetence. India should prove otherwise.” A growing clamor for a strong response from sections of the Indian media, along with Modi’s own past statements criticizing previous Indian governments for being soft on Pakistan , fanned uncertainty about what might follow the Uri attack.

But in a speech this past weekend, Modi signaled that his government would stick to a longstanding Indian policy of treading carefully when it comes to provocations by Pakistan, stepping up efforts to pressure its troublesome neighbor diplomatically, rather than militarily. “I want to tell the people of Pakistan, India is ready to fight you,” he said at a BJP meeting in southern India. “If you have the strength, come forward to fight against poverty. Let’s see who wins. Let’s see who is able to defeat poverty and illiteracy first, Pakistan or India.”

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Analysts say Modi's stance is the result of India’s recognition of the risks of a military clash. War with Pakistan would cast a shadow over India’s growing economy—its the fastest-growing big economy in the world—as well as raising international alarm. “They [the Modi government] have realized that military escalation is next to impossible given the circumstances,” says Happymon Jacob, an expert on Indian-Pakistani relations at Delhi’s Jawaharlal Nehru University. “Having gone through some discussion, the government of India has come to the conclusion that you can only escalate this diplomatically and politically, which is exactly what they are doing.”

There's also the question of whether India even has the capacity to wage war. A recent report from the Carnegie Endowment for International Peace in Washington noted that many of the Indian Air Force’s frontline aircraft were obsolete, while a 2015 assessment by Indian government auditors highlighted worryingly inadequate army ammunition stockpiles.

Ultimately, Modi must balance the demands of the different constituencies at home and abroad, explains Ashok Malik, a senior fellow at the Observer Research Foundation think tank. Domestically, the Prime Minister faces pressure “to be seen to be doing something in response to this attack,” he says. But internationally, India also recognizes the need to build “an even stronger case against Pakistan and emphasize that [terrorism linked to] Pakistan is a challenge not just for India but also the rest of the world.” India’s Foreign Minister Sushma Swaraj pursued this strategy in her speech at the U.N. General Assembly in New York on Sept. 26, when she placed the Uri attack in the context of other recent terror attacks around the world. A day later, India sought to add to the diplomatic pressure on Pakistan by withdrawing from an upcoming meeting of the South Asian Association for Regional Cooperation, a regional grouping, in Islamabad. Modi had planned on traveling to Pakistan for the summit.

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But even if cooler heads prevail for the moment, the worrying possibility of a military flare-up hasn't disappeared. “I don’t think Modi has given up on the military option for the remainder of his term [in office, which expires in 2019],” says Malik. “Unless terrorism completely and miraculously disappears, he cannot give up on that option.”