BANDIPORE, Kashmir — In this high Himalayan valley on the Indian-controlled side of Kashmir, the latest battle line between India and Pakistan has been drawn.

Laborers who work long hours in Bandipore said the work is not merely a matter of electricity. National pride is at stake, they said.
This time it is not the ground underfoot, which has been disputed since the bloody partition of British India in 1947, but the water hurtling from mountain glaciers to parched farmers’ fields in Pakistan’s agricultural heartland.

Indian workers here are racing to build an expensive hydroelectric dam in a remote valley near here, one of several India plans to build over the next decade to feed its rapidly growing but power-starved economy.

In Pakistan, the project raises fears that India, its archrival and the upriver nation, would have the power to manipulate the water flowing to its agriculture industry — a quarter of its economy and employer of half its population. In May it filed a case with the international arbitration court to stop it.

Water has become a growing source of tension in many parts of the world between nations striving for growth. Several African countries are arguing over water rights to the Nile. Israel and Jordan have competing claims to the Jordan River. Across the Himalayas, China’s own dam projects have piqued India, a rival for regional, and even global, power.

But the fight here is adding a new layer of volatility at a critical moment to one of the most fraught relationships anywhere, one between deeply distrustful, nuclear-armed nations who have already fought three wars.

The dispute threatens to upset delicate negotiations to renew peace talks, on hold since Pakistani militants killed at least 163 people in attacks in Mumbai, India, in November 2008. The United States has been particularly keen to ease tensions so that Pakistan can divert troops and matériel from its border with India to its frontier with Afghanistan to fight Taliban insurgents.

Anti-India nationalists and militant networks in Pakistan, already dangerously potent, have seized on the issue as a new source of rage to perpetuate 60 years of antagonism.

Jamaat-u-Dawa, the charity wing of Lashkar-e-Taiba, the militant group behind the Mumbai attacks, has retooled its public relations effort around the water dispute, where it was once focused almost entirely on land claims to Kashmir. Hafiz Saeed, Jamaat’s leader, now uses the dispute in his Friday sermons to whip up fresh hatreds.

With their populations rapidly expanding, water is critical to both nations. Pakistan contains the world’s largest contiguous irrigation system, water experts say. It has also become an increasingly fertile recruiting ground for militant groups, who play on a lack of opportunity and abundant anti-India sentiment. The rivers that traverse Punjab, Pakistan’s most populous province and the heart of its agriculture industry, are the country’s lifeline, and the dispute over their use goes to the heart of its fears about its larger, stronger neighbor.

For India, the hydroprojects are vital to harnessing Himalayan water to fill in the serious energy shortfalls that crimp its economy. About 40 percent of India’s population is off the power grid, and lack of electricity has hampered industry. The Kishenganga project is a crucial part of India’s plans to close that gap.

The Indian project has been on the drawing board for decades, and it falls under a 50-year-old treaty that divides the Indus River and its tributaries between both countries. “The treaty worked well in the past, mostly because the Indians weren’t building anything,” said John Briscoe, an expert on South Asia’s water issues at Harvard University. “This is a completely different ballgame. Now there’s a whole battery of these hydroprojects.”

The treaty, the result of a decade of painstaking negotiation that ended in 1960, gave Pakistan 80 percent of the waters in the Indus River system, a ratio that nationalists in Pakistan often forget. India, the upriver nation, is permitted to use some of the water for farming, drinking and power generation, as long as it does not store too much.

While the Kishenganga dam is allowed under the treaty, the dispute is over how it should be built and the timely release of water. Pakistan contends that having the drainage at the very base of the dam will allow India to manipulate the water flow when it wants, for example, during a crucial period of a planting season.

“It makes Pakistan very vulnerable,” said a lawyer who has worked on past water cases for Pakistan. “You can’t just tell us, ‘Hey, you should trust us.’ We don’t. That’s why we have a treaty.”