The United States is stepping up pressure on India and Pakistan to avoid conflict in Kashmir after a tourist massacre in an Indian-administered area of the divided territory last week.

Pakistan has test-fired a ballistic missile as tensions with India have surged over last month's deadly attack on tourists in the disputed Kashmir region.

India said on Saturday it had banned the import of goods coming from or transiting via Pakistan and barred Pakistani ships as tensions rise between the nuclear-armed neighbours in the wake of a deadly attack on tourists in the disputed Kashmir region.