It requires the participation of the US in order to resolve both the disputes because of the trust deficit among the animus nations. But if India and Pakistan can set aside their security concerns, like, future status of their nuclear and missile capabilities, then they can resolve the dispute without much active American involvement. The role of the US would be then to nudge the two sides for the talks.
But the most important point that both sides need to understand is that there is no military solution to the dispute. In view of the almost nuclear parity and superior Indian capabilities in conventional military matters, the balance of military power rests with India. Indian economic asymmetry and its projection as a leading world power in Asia also helps Indian cause.
The question is not only the military reality but also its understanding by the top generals of both militaries. Of course, this requires the involvement of the South Asia command of the Pentagon. It needs to prove the disutility and futility of waging a war and also about ambiguous results of any hypothetical future war. Even if the war results in the victory of one side so that it is able to change the actual boundaries in Kashmir, the international pressure would make both sides to come back to pre-war boundaries. This along with the issues concerning about nuclear weapons is the responsibility of the US. Rest, India and Pakistan could start themselves, their trust deficit notwithstanding.
For that the ball lies in the court of Muslims of the Valley and Pakistan. If Pakistani government, particularly its military and intelligence establishments, along with the separatists of the Valley agree that Indian stakes are irreversible and irrevocable in any future that they can conceive, then the peace process can start. For that all need to understand that guns and explosives can not bring freedom to Valley people from the nuclear-potent India.
The fact is that gun can not bring freedom from any strong military and financially viable state even if those fighting for the freedom have some kind of Western support. This should not be confused with the recent events taking place in Arab world. The events in Arab world are not international wars and the norms of engagement are different. The dissenters have implicit support of the Western governments and many of their friendly states are providing them with lethal weapons. The CIA has been very active along the borders of nations facing internal conflict, particularly in Syria.
With the help of guns both sides in Kashmir can kill some people, say five hundreds each annually. This is insufficient to make any significant mark into Indian psyche. Moreover, Pakistan by fanning dissent in Kashmir becomes more radicalized by each passing day. For all the causalities that Indian military establishment suffers, the compensation comes from newer entries. If the process continues then eventually Indian political and military would become insensitive towards Kashmiri people in the Valley. Since India can always serve American and other Western interests it may not find much disfavor from the West over Kashmir.
But only counter arguments and rejection theory are not correct. The fact is that Indian Kashmir is far better managed than Pakistani Kashmir. If Pakistan believes that it and events in Arab world can induce revolution in Indian Kashmir then it should also be ready to face heat inside its territory. The fact is that in spite of Pakistan being an Islamic Republic, India is better placed to quell any Islamic revolution inside its territory. Moreover, the present government in New Delhi is planning to provide affirmative actions to Muslims in India which could go long way in undoing dissent against Indian state.
The fact is that Indian Kashmiri people have all kind of protection from dominance from non-Kashmiri people from outside the state something that Pakistan misses. Kashmir has a separate constitution and the legislative power of Indian Parliament is restricted when it comes to Kashmir. Also, the accession of Indian Kashmir to Indian Union is not cost-free demographically, as the Valley has permanent majority in the Assembly. The Valley has more number of Assembly seats than Jammu and Ladakh together and constituencies can not be delimited without the consent of the J&K Assembly.
But to be fair Indian stand has been inconsistent. The accession of Kashmir to Indian state was conditional to approval of the wishes of the people of the whole undivided state. The fact is that Nehru promised to Kashmiri people that their aspirations would be taken into account. Also, the fact is that Nehru told the Parliament that special provisions for the J&K were temporary and that he wished perpetual merger of the state into Indian Union.
The most important thing is that there is a lot of dissent in Valley against the Indian administration. A significant majority of the Valley Muslims do not want to live with the Indian Union. They also do not like Pakistan much and want independence. For that urgent, effective and purposeful dialogue between the separatists and Union government is required. But all the people united against India over Kashmir should understand that it was the West which did not take the side of Pakistan. This becomes more important in view of the fact that there was no al-Qaeda or Taliban then. But past was past, what about the future?
The more likely case is that in view of instability in Pakistan coming out of radicalization and Islamism and also the utility of India in containing China in view of future cold war between the US and China, the West would not take any stand against Indian state as long the identity of Kashmiri Muslims and separate Constitution of Kashmir remain intact. As far as a quiet and non-violent revolution on the lines of Arab upheavals taking shape in Kashmir is concerned, the more likely case is that India would listen to their demands sympathetically and would agree for greater autonomy that is permissible as per Indian Constitution. Moreover, Jammu and Ladakh act as hedge against any anti-Indian activities in the state.
Therefore, what is the best way? India and Pakistan should agree that the time requires converting LoC into permanent border with possibility of uniting Kashmiri people of both sides and with some swap of land between India and Pakistan, including some in Srinagar. Srinagar can become the capital of institutions required to implement Divided Kashmir, United Kashmiri solution. With this the Kashmiri people of undivided Kashmir as it was in 1947 minus the Chinese Kashmir could interact with each other, they can increase the trade and commerce between the two Kashmir and region, they can buy land and other properties, the two people can realize their fullest potential and invest in each other. Both INR and Pakistani Rupee can be made as the mode of economic transaction all over Kashmir with the currencies exchanged at politically convenient exchange rates.
Once the Muslims decide for unending present Indian stakes they should think about their economic betterment. There is nothing more important than economic well-being more so if the majority permanently remains the most dominant. The investments and economic activities will not only improve the economic lives but it will also lessen the tensions and the stress that they face.
There is not much in dying for a cause which fully can not be met. The autonomy which is desirable, Kashmiri people of the whole state can get by India state working out a deal with separatists of the Valley and Pakistan. For peace, stability and prosperity of Kashmir, Indian and Pakistani governments should follow the no-disinvestment, no- disengagement policy and people of the J&K state should be receptive, reciprocal, mutual and open to accept good ideas.