Pakistan is preparing international legal action over India's suspension of a key river water-sharing treaty, a government minister told Reuters, as tensions intensify between the neighbours following an attack on tourists in India-administered Kashmir.

A top Pakistan defense official warned of the possibility of war with India but said it can be averted, as tensions rise over last week’s militant attacks in the northern region of Kashmir that killed 26 people.

Pakistan's defence minister said on Monday a military incursion by neighbouring India was imminent in the aftermath of a deadly militant attack on tourists in Kashmir last week, as tensions rise between the two nuclear-armed nations.