(Bloomberg) — Pakistan said it will respond if India launches a military strike, a day after Prime Minister Narendra Modi’s administration announced plans to divert water from its neighbor as tensions between the nuclear-armed countries remained high following a deadly terrorist attack in Kashmir.

On Friday, Pakistan’s army spokesman said that the country did not want a war with India but warned that Islamabad would retaliate and “dominate the escalation ladder” if New Delhi authorized any military strikes.

“Pakistan’s armed forces shall never be surprised by you, but let me assure you we shall surprise you,” Major General Asif Ghafoor said at a press conference in the garrison town of Rawalpindi on Friday. “We can respond to the full spectrum of threats and I hope you get this message. Don’t mess with Pakistan.”

Still, the scope for escalation is limited. Any military strike risks a miscalculation that could trigger a devastating conflict in one of the world’s most populous areas as both the South Asian nations have nuclear weapons.

India — as well as the U.S. — blames Pakistan for harboring terrorists seeking to destabilize its neighbors, claims Islamabad denies. Separately on Friday, a global anti-money laundering agency said Pakistan has made “limited progress” on a plan to combat terrorism financing due last month.

Other Measures

India announced projects on Thursday, that will stop its share of water in the Indus river basin from flowing into Pakistan, water minister Nitin Gadkari said in a series of tweets. The projects will shift waters from the Ravi and Beas rivers for use in the states of Punjab and Jammu & Kashmir.

The decision came after 40 paramilitary soldiers in Kashmir were killed in an attack last week claimed by Jaish-e-Mohammed, a Pakistan-based terror group. It was the worst strike since Modi came to power in 2014 and comes just months before the country’s general election. New Delhi has blamed Islamabad, though Pakistan’s government has denied any role.

India instead has been desperate to find other ways to pressure Islamabad. So far, it has moved to isolate Pakistan diplomatically, scrapping the most favored nation status granted earlier. Modi’s government also slapped 200 percent duties on imports from the country. India had threatened to review the 1960 Indus Waters Treaty after a previous attack in Kashmir two-and-a-half years ago.

On Thursday, Gadkari said work on the stalled Shahpur-Kandi dam had already begun. Along with a reservoir project using water from the Ujh, the Ravi’s main tributary in Kashmir, India will also link the Ravi and Beas rivers to divert their waters to other basin states, he said.