Srinagar, India (CNN) India said there was "incontrovertible evidence" that Pakistan had a "direct hand" in a bomb attack on a convoy that killed at least 40 people in Indian-administered Kashmir.

After a Cabinet Committee on Security meeting on Friday, Finance Minister Arun Jaitley said in a statement that India would initiate "all possible diplomatic steps" to "ensure the complete isolation from the international community of Pakistan, of which incontrovertible evidence is available of having a direct hand in this gruesome terrorist incident."

Jaitley added that India would downgrade diplomatic relations by withdrawing its "most favored nation status" to Pakistan -- a largely symbolic title.

Thursday's attack on a convoy of Indian soldiers killed 40 and wounded five, said M. Dhinakaran, deputy inspector general of the Central Reserve Police Force. It was deadliest attack on security forces since the beginning of the insurgency in the late 1980s.

Indian security forces inspect the scene of an attack on a paramilitary convoy.

The Indian government has blamed Pakistan-based terrorist organization Jaish-e-Mohammed for the attack.

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