Militants have regrouped in large numbers in Pakistan-occupied Kashmir and are crossing the Line of Control to sneak into the Indian side of the Himalayan region, local residents and political leaders have said.

The militants have regrouped and launched jehadi activities in the Neelum valley on the Pakistani side of the LoC, local politician Arif Shahid said. Local residents and Shahid said the militants were not from PoK.

"Jihadi activities have been restarted during the last few weeks," said Shahid, the secretary general of the All Parties National Alliance.

"Most of the activities are concentrated in the Neelum valley along the LoC," Shahid told the BBC.

Shahid, who had visited the region with other APNA leaders, said the militants were based there in large numbers and had set up camps in the area.

"The men are not locals they have long hair and beards. Most do not speak the local language," he said.

Residents of Neelum valley backed Shahid's assertions.

"We are scared... The armed men are moving around the area and are trying to cross the border," a local resident said.

"We can make out from their appearances and languages they are not from any part of Kashmir," the resident said.     

Shahid said he believed that militants are planning to sabotage ongoing peace negotiations between India and Pakistan.

"They have set up camps in the region and many are crossing the border... This is the start of another proxy war," he said.

Following a meeting between Pakistan Prime Minister Yousuf Raza Gilani and his Indian counterpart Manmohan Singh last month, the Foreign Ministers of the two countries recently agreed to meet in Islamabad on July 15 to nudge the peace process forward.

Shahid's comments were supported by Jammu and Kashmir National Liberation Front leader Shaukat Maqbool Bhat. "The fighters are there and they are regularly crossing into India," Bhat said.

"The local people are very scared they believe the (militant) crossings are going to restart artillery exchanges between the Pakistani and Indian armies," Bhat said.

Indian and Pakistani troops regularly fought artillery duels and exchanged small arms fire till a ceasefire was put in place along the LoC in November 2003.